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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. Sales Cost of goods sold Gross profit Expenses Sales salaries Supplies used Depreciation-Equipment Rent Utilities GARCIA COMPANY Departmental Income Statements For Year Ended December 31 Share of office department expenses Total expenses Income Phone $ 230,000 112,700 117,300 Earbuds $ 115,000 71,300 Combined $ 345,000 184,000 43,700 161,000 20,500 6,900 27,400 500 300 800 1,900 900 2,800 7,100 3,540 10,640 2,900 1,500 4,400 13,000 9,000 45,900 22,140 68,040 $ 71,400 $ 21,560 $ 92,960 22,000 Required: Prepare a departmental contribution to overhead report. Garcia Company Departmental Contribution to Overhead For Year Ended December 31 Direct expenses Total direct expenses Departmental contribution to overhead Phone: Earbuds Combined
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