Accounting-Departmental Direct Operating Margin and Direct Operating Margin

| January 30, 2017

Question
Departmental Direct Operating Margin and Direct Operating Margin Percentage

The sales, gross profit, and condensed direct and indirect operating expenses of departments A and B of Wei Zhao International are as follows:

Dept. A Dept. BTotal

Sales $300,000 $400,000 $700,000

Gross Profit 95,500 180,000 275,000

Direct operating expense 20,000 72,000 92,000

Indirect operating expense 81,000

Compute the departmental direct operating margin and direct operating margin percentage for each department.

Department A Department B
Direct operating margin $ $
Direct operating margin percentage %
%

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