Vortex Company operates a retail store with two departments. Information about those departments follows. Department A...

 

 

 

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Vortex Company operates a retail store with two departments. Information about those departments follows. Department A Department B $437,500 $812,500 480,000 284,375 Sales Cost of goods sold Direct expenses: Salaries Insurance Utilities Depreciation Maintenance Salaries. Insurance Depreciation office expenses 123,000 12,000 23,500 16,500 6,700 The company also incurred the following indirect costs. Department A $34,000 6,400 15,400 45,000 83,000 10,500 26,500 13,000 5,000 Indirect costs are allocated as follows: salaries on the basis of sales; Insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. Additional information about the departments follows. Square footage 34,300 14,700 Number of employees 66 44 Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and Department B. 2. Should Department B be eliminated? Required 1 Required 2 Determine the departmental contribution to overhead and the departmental net income for (Do not round intermediate calculations. Round your final answers to nearest whole dollar.) Depreciation Maintenance VORTEX COMPANY Departmental Contribution Statements Sales Cost of goods sold Gross profit Direct expenses Salaries Insurance Utilities Total direct expenses Departmental contributions to overhead Allocated indirect expenses Salaries Insurance Depreciation Office Total indirect expenses Operating income (loss) Department A Department B $ 812,500 $ 437,500 480,000 284,375 332,500 153,125 123,000 12,000 23,500 16,500 6,700 181,700 150,800 0 $ 150,800 $ 83,000 10,500 26,500 13,000 5,000 138,000 15,125 0 15,125 < Prev 11 of 12 www Nex Required 1 Required 2 Should Department B be eliminated? Should Department B be eliminated? Yes. < Required 1 Required 2 > Vortex Company operates a retail store with two departments. Information about those departments follows. Department A Department B $437,500 $812,500 480,000 284,375 Sales Cost of goods sold Direct expenses: Salaries Insurance Utilities Depreciation Maintenance Salaries. Insurance Depreciation office expenses 123,000 12,000 23,500 16,500 6,700 The company also incurred the following indirect costs. Department A $34,000 6,400 15,400 45,000 83,000 10,500 26,500 13,000 5,000 Indirect costs are allocated as follows: salaries on the basis of sales; Insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. Additional information about the departments follows. Square footage 34,300 14,700 Number of employees 66 44 Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and Department B. 2. Should Department B be eliminated? Required 1 Required 2 Determine the departmental contribution to overhead and the departmental net income for (Do not round intermediate calculations. Round your final answers to nearest whole dollar.) Depreciation Maintenance VORTEX COMPANY Departmental Contribution Statements Sales Cost of goods sold Gross profit Direct expenses Salaries Insurance Utilities Total direct expenses Departmental contributions to overhead Allocated indirect expenses Salaries Insurance Depreciation Office Total indirect expenses Operating income (loss) Department A Department B $ 812,500 $ 437,500 480,000 284,375 332,500 153,125 123,000 12,000 23,500 16,500 6,700 181,700 150,800 0 $ 150,800 $ 83,000 10,500 26,500 13,000 5,000 138,000 15,125 0 15,125 < Prev 11 of 12 www Nex Required 1 Required 2 Should Department B be eliminated? Should Department B be eliminated? Yes. < Required 1 Required 2 >

Answer rating: 100% (QA)

Answer 1 Particulars Department A Department B Sales 812500 437500 Less Cost of Goods Sold 480000 28... View the full answer