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A company has one service department (Office) and two operating departments (Tablet and Desktop). Indirect expenses (rent and utilities) and service department expenses (office)
A company has one service department (Office) and two operating departments (Tablet and Desktop). Indirect expenses (rent and utilities) and service department expenses (office) are allocated to the operating departments. Departmental income statements follow. The company is considering eliminating the Desktop department due to its loss. Departmental Income Statements For Year Ended December 31 Sales Tablet Cost of goods sold Gross profit Expenses Salaries Depreciation Rent Utilities Share of office department expenses Total expenses Income (loss) Enter answers in the tabs below.. $ 230,000 112,700 117,300 Desktop $ 100,500 62,300 38,200 Combined $ 330,500 175,000 155,500 21,000 8,400 29,400 1,700 1,100 2,800 7,230 3,740 10,970 2,500 2,000 4,500 15,000 28,000 43,000 47,430 43,240 90,670 $ 69,870 $ (5,040) $ 64,830 Req 1 Req 2 and 3 Prepare a departmental contribution to overhead report for the year. Departmental Contribution to Overhead For Year Ended December 31 Gross profit Direct expenses Total direct expenses Departmental contribution to overhead Tablet Desktop Combined < Reg 1 Req 2 and 3> Req 1 Req 2 and 3 2. Which department contributed the most to overhead? 3. Should the Desktop department be eliminated based on its contribution to overhead? 2. Which department contributed the most to overhead? 3. Should the Desktop department be eliminated based on its contribution to overhead? < Req 1 Req 2 and 3>
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