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Don't worry about the incorrect total expenses for the two columns. Required information The following information applies to the questions displayed below.] Elegant Decor Company's
Don't worry about the incorrect total expenses for the two columns.
Required information The following information applies to the questions displayed below.] 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 2017 departmental income statements show the following ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2017 Dept. 100 Dept. 200 Combined $436,000 $290,000 $726,000 262,000 257,000 Sales 174,000 469,000 83,000 Cost of goods sold Gross profit Operating expenses Direct expenses Advertising Store supplies used 17,000 4,000 5,000 26,000 12,000 3,800 3,300 19,100 29,000 7,800 8,300 45,100 Depreciation-Store equipment Total direct expenses Allocated expenses Sales salaries 65,000 9,440 9,900 18,720 2,000 2,400 39,000 4,720 8,100 12,480 1,100 1,600 67,000 104,000 14,160 18,000 31,200 3,100 Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses 4,000 174,460 219,560 Total allocated expenses 107,460 133,460 86,100 Total expenses 40,540 (3,100) 37,440 Net income (loss) In analyzing whether to eliminate Department 200, management considers the following o de fs nae t ed tn ao e 0 de ts tly tti or n nn n ui w tueenes cbke O", a aeeCa dt ngTh 3 Te edehat si asb n k-f-dat do ekt al pea ns> se nre rl rt e s esoiw afge alda aTeo ad ll peiad orsa gmed ye. 2 oa rep hahee e in a el lin ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Eliminated Continuing Expenses ExpensesExpenses $ 469,000 Cost of goods sold Direct expenses Advertising 29,000 Store supplies used 7,800 8,300 8,300 Depreciation Store equipment Allocated expenses Sales salaries 104,000 Rent expense 14,160 14,160 18,000 Bad debts expense Office salary 31,200 3,100 Insurance expense Miscellaneous office expenses 4,000 $ 688,560$ 0$22,460 Total expenses
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