Gardella Corporation Has Two Divisions: Domestic Division and Foreign Division

question 20

Multiple Choice

Gardella Corporation has two divisions: Domestic Division and Foreign Division. The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales.The company's overall break-even sales is closest to:

• A) $449,317
• B) $134,827
• C) $470,663
• D) $335,836

---

Definitions:

Purchases Journal

A record keeping document used to note all credit purchases of inventory and other items made by a company.

Establishment of Responsibility

An internal control principle focusing on assigning specific responsibilities to particular employees to reduce errors and fraud.

Segregation of Duties

An internal control measure where no single individual is given too much responsibility in areas of financial reporting, transaction processing, or asset management to prevent fraud and errors.

Documentation Procedures

The methods and practices used for creating, managing, and safeguarding documents within an organization.