Question
Financial statements for three departments of Furniture-R-Us are provided below: Chairs Tables Sofas Department Department Department Sales 600,000 2,500,000 2,500,000 CGS 327,600 1,400,000 2,000,000 Gross
Financial statements for three departments of Furniture-R-Us are provided below: Chairs Tables Sofas Department Department Department Sales 600,000 2,500,000 2,500,000 CGS 327,600 1,400,000 2,000,000 Gross Profit 272,400 1,100,000 500,000 Salaries 170,000 950,000 500,000 Insurance 20,200 24,200 11,300 Utilities 37,900 18,700 5,200 Depreciation 20,700 44,620 18,280 Maintenance 7,000 4,700 7,000 Property taxes 20,580 70,560 17,640 Total Expenses 276,380 1,112,780 559,420 Net Income (loss) (3,980) (12,780) (59,420)
Assuming that depreciation, Maintenance, and property taxes are allocated costs, use departmental contribution to overhead to determine which department or departments should be considered for elimination?
Group of answer choices
Eliminate Sofas Dept. and Tables Dept.
Eliminate Chairs Dept.
Eliminate Chairs Dept., Tables Dept., and Sofas Dept.
Eliminate Tables Dept.
Eliminate Sofas Dept.
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