Question
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. GARCIA COMPANY Departmental Income Statements For Year Ended December 31 Phone Earbuds Combined Sales $ 200,000 $ 95,000 $ 295,000 Cost of goods sold 98,000 58,900 156,900 Gross profit 102,000 36,100 138,100 Expenses Sales salaries 21,000 6,900 27,900 Supplies used 1,000 800 1,800 DepreciationEquipment 2,400 700 3,100 Rent 7,110 4,020 11,130 Utilities 2,400 2,000 4,400 Share of office department expenses 10,500 9,500 20,000 Total expenses 44,410 23,920 68,330 Income $ 57,590 $ 12,180 $ 69,770 Required: Prepare a departmental contribution to overhead report.
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