Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Vortex Company operates a retail store with two departments

Vortex Company operates a retail store with two departments

Accounting

Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $812,500 480,000 Department B $437,500 284,375 Sales Cost of goods sold Direct expenses Salaries Insurance Utilities Depreciation Maintenance 123,000 12,000 23,500 16,500 6,700 83,000 10,500 26,500 13,000 5,000 The company also incurred the following indirect costs. Salaries Insurance Depreciation Office expenses $34,000 6,400 15,400 45,000 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. Department Square footage Number of employees 14,700 44 34,300 66 Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and Department 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.) VORTEX COMPANY Departmental Contribution Statements Department A Department B Sales $ 812,500 $ 437,500 Cost of goods sold 480,000 284,375 Gross profit 332,500 153,125 Direct expenses Salaries 123,000 83,000 Insurance 12,000 10,500 Utilities 23,500 26,500 Depreciation 16,500 13,000 Maintenance 6,700 5,000 181,700 150,800 138,000 15,125 Total direct expenses Departmental contributions to overhead Allocated indirect expenses Salaries Insurance Depreciation Office 0 Total indirect expenses Operating income (loss) $ 0 15.125 150,800 $ < Prey 11 of 12 Nex Required 1 Required 2 Should Department B be eliminated?

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE