Exercise 24-3 (Algo) Service department expenses allocated to operating departments LO P2

Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $25,300 and for Purchasing is $20.200. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Purchase Department Sales Orders Books $ 182,408 1,025 Magazines 87, 480 625 Newspapers 110, 209 850 Total $ 380,000 2, 500 Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information. Office Allocation Base Percent of Allocation Base Cost to be Allocated | Allocated Cost Department Numerator Denominator | % of Total Books Magazines Newspapers Totals Purchasing Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Numerator Denominator | % of Total Books Magazines Newspapers TotalsRequired 1 Required 2 Based on contribution to overhead, should the electric guitar department be eliminated? Based on contribution to overhead, should the electric guitar department be eliminated?Below are departmental income statements for a guitar manufacturer, The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating its Electric Guitar department because it shows a loss. Departmental Income Statements For Year Ended December 31 Acoustic Electric Sales $ 102, 009 $ 84, 200 Cost of goods sold 44, 175 46, 858 Gross profit 57,825 37,358 Expenses Advertising 4,985 4, 280 Depreciation-Equipment 18, 979 8, 528 Salaries 19,860 17, 100 Supplies used 1,930 1, 770 Rent 7,015 6,028 Utilities 3,025 2,570 Total expenses 46, 825 40, 260 Income (loss) $ 11,066 (016'2) $ 1. Prepare a departmental contribution to overhead report 2. Based on contribution to overhead, should the electric guitar department be eliminated? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead For Year Ended December 31 Acoustic Electric Combined Gross profit Direct expenses Total direct expenses 0 0 Departmental contribution to overhead $ o $ 0 $ 0