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 GARCIA COMPANY Departmental Income Statements For Year Ended December 31 Phone Rent Utilities Share of office department expenses Total expenses Income $ 220,000 107,800 112,200 22,500 700 1,500 7,060 2,500 12,000 46,260 $ 65,940 Earbuds $ 115,000 71,300 43,700 7,500 450 700 3,900 1,400 10,000 23,950 $ 19,750 Combined $ 335,000 179,100 155,900 30,000 1,150 2,200 10,960 3,900 22,000 70,210 $ 85,690

Garcia Company has two operating departments (Phone and Earbuds) and one service department (Office) .ts departmental income statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses