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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
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 shows the following. ELEGANT DECOR COMPANY Departmental Income Statements $443 , $281, eoe $724, ooo 261, 208, eoe 469 , 000 182, ooo 255, 10, 500 45, 700 104, ooo 14, 120 17, 107,330 173,920 132, 830 219,620 $ 49, $(13, 790) $ 35,380 For Year Ended December Dept . 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Direct expenses Advertising Store supplies used DepreciationStore equipment Total direct expenses Allocated expenses Sales salaries Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses Total allocated expenses Total expenses Net income (loss) 100 16, ooo 5, 500 4, ooo 25, 500 65, 9, 410 9, 700 18, 720 2, 300 Dept . 200 73, eoe 12, 500 5, eoe 2, 700 20, 200 39, eoe 4, 710 7 , 400 12,480 1, 500 1, 500 66, 590 86, 790 Combined 28, 500 6, 700 31, 3, 800 3, 700
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