Even Electronics Ltd operates three selling departments. Certain indirect expenses are allocated to the selling departments as follows:

	Amount				Basis of allocation
Administration Personnel department Marketing Utilities Insurance on inventory		$160 000 84 000 25 000 172 000 118 000			Sales Number of staff Sales Floor space Average inventory

The following information is obtained from store records for the last financial year:

		Computers				Software			Accessories
Sales Number of staff Floor Space Average inventory			$840 000 5 1 000 m2 $135 360			$240 000 3 600 m2 $37 600			$120 000 2 400 m2 $15 040

Required

A. Prepare a schedule allocating the indirect expenses to the three departments.

B. Assuming all products are priced so that they provide a 60 % gross margin, calculate the contribution of each department and comment on why the business may still choose to keep all three departments.