QUESTION 23 2 points Save Answer When preparing an income statement showing departmental contribution margin: O indirect expenses are combined with direct expenses. O indirect departmental expenses are added to contribution margin. O direct expenses are subtracted from gross profit of a department. O None of the above answers is correct. QUESTION 24 2 points Save Answer Which allocation base is best used to allocate building depreciation? O Number of employees O Square feet of space used O Electric usage O Hours used QUESTION 25 2 points Save Answer Which allocation base is best used to allocate advertising expense by selling department? O Square feet of spaced used O Gross sales of each department as a percent of total gross sales O An even split among all selling departments O Some other method not listed QUESTION 26 2 points Save Answer What is the purpose for determining contribution margin? To show the contribution by department toward covering indirect costs O To help determine whether or not to eliminate a department O To show the effect on net income for each department O All of the above answers are correct. QUESTION 27 2 points Save Answer Sales minus cost of goods sold yields: O income before taxes. O gross profit O other revenues. O operating expenses QUESTION 28 2 points Save Answer On a departmental income statement, sales less cost of goods sold and direct expenses equals: O indirect expenses. O income before taxes. O gross margin. O departmental contribution margin