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 $ 180,000 $ 115,000 $ 295,000 Cost of goods sold 88,200 71,300 159,500 Gross profit 91,800 43,700 135,500 Expenses Sales salaries 20,500 8,000 28,500 Supplies used 650 650 1,300 DepreciationEquipment 1,700 700 2,400 Rent 7,050 3,600 10,650 Utilities 2,900 1,600 4,500 Share of office department expenses 10,000 5,500 15,500 Total expenses 42,800 20,050 62,850 Income $ 49,000 $ 23,650 $ 72,650 Required: Prepare a departmental contribution to overhead report.
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