chapter 22 part 2/3

Gomez Company has two service departments (Personnel and Office) and two operating departments (Shoes and Clothing). Following are the direct expenses and square feet occupied by the four departments, and the total sales for the two operating departments. The company also has $50,000 of utilities expense, which is an indirect expense to all departments and is allocated to the four departments based on square feet occupied. The Shoes department has 20 employees and the Clothing department has 180 employees. Personnel expense is allocated to operating departments based on the number of employees. Office expense is allocated to operating departments based on sales. 1. Allocate utilites expense to the four departments. 2. Allocate personnel expense to the Shoes and Clothing departments. 3. Allocate office expense to the Shoes and Clothing departments. The Ski department reports sales of $625,000 and cost of goods sold of $437,500. Its expenses follow. 1. For the Ski department only, prepare a departmental income statement. 2. \& 3. For the Ski department only, prepare a departmental contribution to overhead report. Based on these two reports, should the Ski department be eliminated? Complete this question by entering your answers in the tabs below. For the Ski department only, prepare a departmental income statement. For the Ski department only, prepare a departmental income statement