HP 226 Help Save & ExitSubmit 2 Check my work Vorte x Company operates a retail

Question

HP 226 Help Save & ExitSubmit 2 Check my work Vorte x Company operates a retail store with two departments. Information about those departments follows. Departmen A Department B 3.75 points Sales Cost of goods sold Direct expenses $819,000 480,000 $441,000 286,650 eBook Print References Salaries Insurance Utilities Depreciation Maintenance 119,000 17,000 21,500 19,000 6,100 87,000 10,900 29,000 13,000 5,000 The company also incurred the following indirect costs. Salariers Insurance Depreciation Office expenses $31,000 7,600 15,000 47,000 Indirect costs are allocated as follows: salaries on the basis office expenses on the basis of number of employees. Additional information about the departments follows. of sales; insurance and depreciation on the basis of square footage; and 1,500 13,500 30 Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and Department B. (D not round intermediate calculations. Round your final answers to nearest whole dollar)

Explanation / Answer

DEPARTMENTAL CONTRIBUTION STATEMENT DEPTT A DEPTT B Sales revenue 819000 441000 Cost of goods sold 480000 286650 Gross margin before direct expense 339000 154350 Direct expense Salaries 119000 87000 Insurance 17000 10900 Utilities 21500 29000 Depreciation 19000 13000 Maintenance 6100 5000 Total Direct expense 182600 144900 Gross margin 156400 9450 Allocated indirect expensse Salaries ($31000 in sales ratio) 20150 10850 Insurance ($7600 in sq. feet) 5320 2280 Depreciation($ 15000 in sqs. Feet) 10500 4500 Office expense ($ 47000 in No. Of employees) 32900 14100 Total Indirect expense 68870 31730 Net operatin income/(loss) 87530 -22280

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