Biz Helper Inc. has three departments: printing, supplies, and cards. Certain information about the revenues and expenses of the departments for the year ending December 31, 2019, is given below. Indirect expenses have been allocated on bases similar to those discussed and illustrated in the text:

INSTRUCTIONS
1. Prepare a departmental income statement showing the contribution margin and the net profit for each department.
2. Based solely on accounting information, would you recommend that any departments be closed? Explain.
3. What information, other than accounting data, would you suggest the owners consider in deciding whether to close any departments?
Analyze: What increase in gross profit would be required to ensure that the Cards Department would be able to cover its indirect expenses? Assume that all other figures remained steady.

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Printing Supplies Cards Total Allocated Indirect Expenses Direct Expenses |Cost of Goods Sold Sales Sales Returns and Allowances $ 7,000 40,000 $ 3,000 8,500 11,970 19,950 $ 25,000 $ 15,000 9,500 120,250 185,000 1,500 58,000 86,100 145,000 1,500 218,320 349,950 3,500 500