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IThe following information applies to the questions displayed below. Elegant Decor Company's management is trying to decide whether to elminate Department 200, which has produced
IThe following information applies to the questions displayed below. Elegant Decor Company's management is trying to decide whether to elminate Department 200, which has produced losses or low profits for several years. The company's 2015 departmental Income statements shows the following. ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2015 Dept 100 Dept 200 Combined $450,000 $283,000 $733,000 211,000 478,000 Dept. 100 Dept. 200 Combined Sales Cost of goods sold 478,000 255,000 267,000 Gross profit Operating expenses 183,000 72,000 Direct expenses Advertising Store supples used Depreclation-Store equipment 16,500 4,500 4,000 11,500 4,000 2,300 28,000 8,500 6,300 Total direct expenses 25,000 17,800 42,800 Allocated expenses Sales salaries Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses 52,000 9,440 9,400 15,600 1,700 2,300 31,200 4,780 7,100 10,400 900 1,600 83,200 14,220 16,500 26,000 2,600 3,900 Total allocated expenses 55,980 146.420 189.220 $ 67,560 $ (1.780) $ 65,780 90,440 Total expenses 115,440 73,780 Net Income (loss)
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