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5-9 A company has two departments, Y and z that incur wage expenses. An analysis of the total wage expense of $19,000 indicates that Dept.
5-9 A company has two departments, Y and z that incur wage expenses. An analysis of the total wage expense of $19,000 indicates that Dept. Y had a wage expense of and $2,000 and Dept. Z had a direct wage expense of $3, 500. The remaining expenses are indirect and analysis indicates they should be allocated evenly between the two departments. Departmental wage expenses for Dept. Y and Dept. Z, respectively, are: $10.250; $8, 750. $8, 750; $10, 250. $2,000; $3, 500 $6, 750; $6, 750. $9, 500; $9, 500. Which of the following is not a step in creating operating department income statements? Allocate indirect expenses across departments. Prepare the departmental income statements Eliminate the uncontrollable costs for each department. Accumulate revenues and direct expenses by department. Allocate service department expenses to operating departments. An expense that is readily traced to a department because it is incurred for that department's sole benefit is a(n): Administrative expense. Recurring expense. Common expense Direct expense. Indirect expense. Regardless of the system used in departmental cost analysis: Neither direct nor indirect costs are allocated. Total departmental costs will always be the same. Direct costs are allocated, indirect costs are not. Indirect costs are allocated, direct costs are not. Both direct and indirect costs are allocated. A department that incurs costs without directly generating revenues is a: Service center. Performance center. Production center. Cost center. Profit center
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