2. Dunnes Stores operates a retail store and has two service departments and two operating departments, Hardware and Automotive. During the current year, the departments had the following direct expenses and occupied the following amount of floor space.

Department Sales Direct Expenses Square Feet

Advertising $50,000 750

Administrative 100,000 1,500

Hardware $675,000 150,000 3,000

Automotive $825,000 200,000 9,750

Indirect expenses include rent, utilities, and insurance expense and totaled $220,000. Indirect expenses of $220,000 are allocated to all departments on the basis of square footage.

The advertising departments expenses are allocated on the basis of ad spots developed and aired. The department developed and aired 60 spots for Hardware and 90 spots for Automotive.

The administrative departments expenses are allocated on the basis of sales.

Prepare a departmental income statement for Dunnes. To receive full credit, you must attach a sheet to the back of this page showing your work.