Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not Elegant Decor Company's management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The company's departmental income statements show the following. Dept. 200 $284,000 212,800 72,000 Combined $734,000 478,000 256,000 ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2019 Dept. 100 Sales $450,000 Cost of goods sold 266,eee Gross profit 184,000 Operating expenses Direct expenses Advertising 17,000 Store supplies used 5,500 Depreciation-Store equipment 4,200 Total direct expenses 26,700 Allocated expenses Sales salaries 65, eee Rent expense 9,420 Bad debts expense 9,600 Office salary 15,600 Insurance expense 2,300 Miscellaneous office expenses 2,600 Total allocated expenses 104,520 Total expenses 131,220 Net income (loss) $ 52,780 14,90 5,000 2,700 21,700 31,000 10,500 6,980 48,400 39,000 4,710 7,600 10,480 1,400 1,800 64,910 86,610 $(14,610) 184,000 14,130 17,200 26,000 3,700 4,400 169,430 217,830 $ 38,170 In analyzing whether to eliminate Department 200, management considers the following: mo Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicat In analyzing whether to eliminate Department 200, management considers the following: a. The company has one office worker who earns $500 per week, or $26.000 per year, and four salesclerks who each earns $500 per week, or $26,000 per year for each salesclerk. b. The full salaries of two salesclerks are charged to Department 100. The full salary of one salesclerk is charged to Department 200. The salary of the fourth clerk, who works halftime in both departments, is divided evenly between the two departments. C. Eliminating Department 200 would avoid the sales salaries and the office salary currently allocated to it. However management prefers another plan. Two salesclerks have indicated that they will be quitting soon Management believes that their work can be done by the other two clerks if the one office worker works in sales half-time. Eliminating Department 200 will allow this shift of duties. If this change is Implemented, half the office worker's salary would be reported as sales salaries and half would be reported as office salary. d. The store building is rented under a long-term lease that cannot be changed. Therefore, Department 100 will use the space and equipment currently used by Department 200. e. Closing Department 200 will eliminate its expenses for advertising, bad debts, and store supplies: 73% of the insurance expense allocated to it to cover its merchandise inventory, and 24% of the miscellaneous office expenses presently allocated to it. Required: 1. Complete the following report showing total expenses, expenses that would be eliminated by closing Department 200 and the expenses that would continue. The statement should reflect the reassignment of the office worker to one-half time as salesclerk. expenses that would continue. The statement should reflect the reassignment of the office won * Answer is not complete. Part 1 of 3 ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Eliminated Continuing Expenses Expenses Expenses oints 28,000 $ 9,600 X 8,700 12,000 4,600 X 0 16,000 % 5,000 % 8,700 X Direct expenses Advertising Store supplies used Advertising Allocated expenses Sales salaries Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses Total expenses 104.000 14,210 X 16,800 X 31,200 3,500 3,300 $ 219 310 36,400 0 7,300 X 15,600 952 286 X 77,138 67,600 14,210 x 9,500 15,600 % 2,548 x 3,014% 142,172 $ $ mo Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicat In analyzing whether to eliminate Department 200, management considers the following: a. The company has one office worker who earns $500 per week, or $26.000 per year, and four salesclerks who each earns $500 per week, or $26,000 per year for each salesclerk. b. The full salaries of two salesclerks are charged to Department 100. The full salary of one salesclerk is charged to Department 200. The salary of the fourth clerk, who works halftime in both departments, is divided evenly between the two departments. C. Eliminating Department 200 would avoid the sales salaries and the office salary currently allocated to it. However management prefers another plan. Two salesclerks have indicated that they will be quitting soon Management believes that their work can be done by the other two clerks if the one office worker works in sales half-time. Eliminating Department 200 will allow this shift of duties. If this change is Implemented, half the office worker's salary would be reported as sales salaries and half would be reported as office salary. d. The store building is rented under a long-term lease that cannot be changed. Therefore, Department 100 will use the space and equipment currently used by Department 200. e. Closing Department 200 will eliminate its expenses for advertising, bad debts, and store supplies: 73% of the insurance expense allocated to it to cover its merchandise inventory, and 24% of the miscellaneous office expenses presently allocated to it. Required: 1. Complete the following report showing total expenses, expenses that would be eliminated by closing Department 200 and the expenses that would continue. The statement should reflect the reassignment of the office worker to one-half time as salesclerk. expenses that would continue. The statement should reflect the reassignment of the office won * Answer is not complete. Part 1 of 3 ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Eliminated Continuing Expenses Expenses Expenses oints 28,000 $ 9,600 X 8,700 12,000 4,600 X 0 16,000 % 5,000 % 8,700 X Direct expenses Advertising Store supplies used Advertising Allocated expenses Sales salaries Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses Total expenses 104.000 14,210 X 16,800 X 31,200 3,500 3,300 $ 219 310 36,400 0 7,300 X 15,600 952 286 X 77,138 67,600 14,210 x 9,500 15,600 % 2,548 x 3,014% 142,172 $ $