Jansen Company reports the following for its ski department for the year 2015. All of its costs are direct, except as noted.
Sales . . . . . . . . . . . . . . . . . . . . .$605,000
Cost of goods sold. . . . . . . . . . 425,000
Salaries . . . . . . . . . . . . . . . . . . . 112,000 ($15,000 is indirect)
Utilities. . . . . . . . . . . . . . . . . . . 14,000 ($3,000 is indirect)
Depreciation . . . . . . . . . . . . . . 42,000 ($10,000 is indirect)
Office expenses . . . . . . . . . . . . 20,000 (all indirect)
Prepare a
(1) Departmental income statement for 2015
(2) Departmental contribution to overhead report for 2015.
(3) Based on these two performance reports, should Jansen eliminate the ski department?