The choices for this inquiry are not provided; here is the section that is absent:
What two kinds of departmentalization can be seen in this instance?
A. Product and customer
B. Product and geographical
C. Customer and geographical
D. Functional and customer
E. Geographical and functional
The correct response to this query is B. Product and geographical
Explanation:
Departmentalization is the process of forming departments, units, etc., within businesses to enhance goal achievement and allocate roles and tasks. This can occur based on various factors such as geography, products, or functions.
In the situation of Spicy Dish, a distinct geographical departmentalization is apparent since the distributor has organized units according to location, allowing the company to have a unit in every significant geographical area like North America, Europe, etc. Additionally, this firm has established units according to products as it has created two distinct units in North America, with each focusing on a different product (beans/salsa.)
Answer:
Income statement prepared under the absorption costing method
Sales 2,600,000
Less: Cost of Goods Sold
Beginning Inventory 0
Add: Cost of Goods Produced
Materials Used 1,218,000
Labor Costs 522,000
Variable Overhead 87,000
Fixed Overhead 130,500
Less: Ending Inventory (1,957,500/4,350)×350 (157,500) 1,800,000
Gross Profit 800,000
Less: Operating Costs:
Selling and Administrative Expenses:
Variable Sales/Administrative Costs (60,000)
Fixed Sales/Administrative Costs (25,000)
Net Profit 715,000
Explanation:
Product/Manufacturing Cost under Absorption Costing = Direct Materials + Direct Labor + Variable Overheads + Fixed Overheads
Period Cost under Absorption Costing = All Non-Manufacturing Expenses
