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Garcia Company has two operating departments (Phone and Earbuds) and one service department (Office). Its departmental income statements follow. Indirect expenses and service department expenses
Garcia Company has two operating departments (Phone and Earbuds) and one service department (Office). Its departmental income statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses. Earbuds $ 125,000 77,500 47,500 Combined $ 335,000 180,400 154,600 GARCIA COMPANY Departmental Income Statements For Year Ended December 31 Phone Sales $ 210,000 Cost of goods sold 102,900 Gross profit 107,100 Expenses Sales salaries 19,500 Supplies used 900 Depreciation-Equipment 2,100 Rent 7,040 Utilities 2,300 Share of office department expenses 10,500 Total expenses 42,340 Income $ 64,760 7,000 650 800 3,960 2,200 6,000 20,610 $ 26,890 26,500 1,550 2,900 11,000 4,500 16,500 62,950 $ 91,650 Required: Prepare a departmental contribution to overhead report. Garcia Company Departmental Contribution to Overhead For Year Ended December 31 Phone Earbuds Combined Direct expenses Total direct expenses Departmental contribution to overhead
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