Multiple Choice Problems

Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:

white division grey division

sales - net $200.000 $400.000

salary expense $28.000 $48.000

cost of good sold $100.000 $159.000

The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000.

1. Gross profit for the White and Grey Divisions is:

white grey

(a) $72.000 $193.000

(b) $172.000 $352.000

(c) $100.000 $241.000

(d) $52.000 $163.000

(e) $72.000 $163.000

A. Choice A B. Choice B C. Choice C D. Choice D E. Choice E

2. Grey Division's departmental income is: A. $163,000. B. $211,000. C. $241,000. D. $ 52,000. E. $173,000.