22) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing
all three of its divisions-Construction, Manufacturing, and Military. The Construction Division has been allocated a
total of $192,000 of costs from the procurement department. Of that amount, 75% is considered traceable to the
three product types within the division-Civil Construction, Residential Construction, and Commercial Construction.
The division will calculate an allocation rate to assign the traceable costs to each of the three product types based on
number of purchase orders processed within each product type. Please refer to the following information:
The amount allocated to the Residential Construction Product Line should be:
A) $20,250.
B) $40,500.
C) $27,000.
D) $54,000.
23) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing
all three of its divisions-Construction, Manufacturing, and Military. The Construction Division has been allocated a
total of $192,000 of costs from the procurement department. Of that amount, 75% is considered traceable to the
three product types within the division-Civil Construction, Residential Construction, and Commercial Construction.
The division will calculate an allocation rate to assign the traceable costs to each of the three product types based on
number of purchase orders processed within each product type. Please refer to the following information:
The amount allocated to the Commercial Construction Product Line should be:
A) $83,250.
B) $40,500.
C) $111,000.
D) $96,750.
24) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing
all three of its divisions-Construction, Manufacturing, and Military. The Construction Division has been allocated a
total of $192,000 of costs from the procurement department. Of that amount, $144,000 is considered traceable to
the three product types within the division-Civil Construction, Residential Construction, and Commercial
Construction. The traceable amounts are further allocated to the three product types within the division as shown
here:
The above information is used to complete a performance report, the divisional income statement, for the
Construction Division. On that report, the product margin for the Civil Construction product type is:
A) ($3,275).
B) $16,500.
C) ($8,250).
D) ($13,500).
25) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing
all three of its divisions-Construction, Manufacturing, and Military. The Construction Division has been allocated a
total of $192,000 of costs from the procurement department. Of that amount, $144,000 is considered traceable to
the three product types within the division-Civil Construction, Residential Construction, and Commercial
Construction. The traceable amounts are further allocated to the three product types within the division as shown
here:
The above information is used to complete a performance report, the divisional income statement, for the
Construction Division. On that report, the product margin for the Residential Construction product tis:
A) $3,000
B) $16,500
C) ($8,250)
D) ($13,500)
26) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing
all three of its divisions: Construction, Manufacturing, and Military. The Construction Division has been allocated a
total of $192,000 of costs from the procurement department. Of that amount, $144,000 is considered traceable to
the three product types within the division: Civil Construction, Residential Construction, and Commercial
Construction. The traceable amounts are further allocated to the three product types within the division as shown
here:
The above information is used to complete a performance report, the divisional income statement, for the
Construction Division. On that report, the product margin for the Commercial Construction product type is:
A) $44,875.
B) $17,250.
C) $72,750.
D) ($13,500).
27) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing
all three of its divisions-Construction, Manufacturing, and Military. The Construction Division has been allocated a
total of $192,000 of costs from the procurement department. Of that amount, $144,000 is considered traceable to
the three product types within the division-Civil Construction, Residential Construction, and Commercial
Construction. The traceable amounts are further allocated to the three product types within the division as shown
here:
The above information is used to complete a performance report, the divisional income statement, for the
Construction Division. On that report, the divisional segment margin for the whole Construction Division, including
all relevant costs, is:
A) $81,000.
B) $33,000.
C) $48,000.
D) ($15,000).
28) Henderson Industrial Products Company has three divisions–Construction, Manufacturing, and Military. It has
also identified costs associated with several common service departments and has traced those costs to each division.
The Construction Division Income Statement is shown here:
Construction Division Income Statement
Henderson is now consolidating the division data into a company income statement. The Manufacturing Division
reports division margin of $24,000; the Military Division reports division margin of negative $4,000. In addition to
the data from the three divisions, there are common non-traceable costs of $21,000. How much is the total company
net operating income?
A) $17,200
B) $43,500
C) $53,000
D) $32,000
29) Michael McNaulty is responsible for running the accounting department of a large manufacturing company.
The company has multiple divisions and multiple products. McNaulty’s business unit would most accurately be
described as a(n):
A) cost center.
B) revenue center.
C) profit center.
D) investment center.
30) Linda Diaz is responsible for managing the hand tool product line of a large manufacturing company. Linda’s
business unit would most accurately be described as a(n):
A) cost center.
B) revenue center.
C) profit center.
D) investment center.
31) Liam O’Connor is responsible for managing the residential construction division of a large diversified real estate
development company. Liam’s business unit would most accurately be described as a(n):
A) cost center.
B) revenue center.
C) profit center.
D) investment center.
32) John McGee is responsible for managing the Midwest sales region of a home health care service company. His
business unit would most accurately be described as a(n):
A) cost center.
B) revenue center.
C) profit center.
D) investment center.
33) Henderson Industrial Products Company has three divisions-Construction, Manufacturing, and Military. It has
also identified costs associated with several common service departments and has traced those costs to each division.
The Construction Division Income Statement is shown here:
Construction Division Income Statement
Henderson is now consolidating the division data into a company income statement. The format is shown below,
including the data from the other two divisions-Manufacturing and Military. Using this format, please insert the
relevant data for the Construction Division and complete the statement.
Henderson Industrial Products – Income Statement
34) Henderson Industrial Products uses a centralized service department for procurement of raw materials, servicing
all three of its divisions-Construction, Manufacturing, and Military. The Construction Division has been allocated a
total of $192,000 of costs from the procurement department. Of that amount$144,000 is considered traceable to the
three product types within the division-Civil Construction, Residential Construction, and Commercial Construction.
The traceable amounts are further allocated to the three product types within the division as shown here:
Construction Division
Please complete a performance report, the divisional income statement, for the Construction Division, using the
format shown here:
Construction Division Income Statement