please help to solve the problem below:
other two departments. 1When opened: the new painting department will ll one-fth of the space presently used by the clock department and one-fourth used by the mirror department. Management does not predict any increase in utilities costs: which are allocated to the departments in proportion to occupied space {or rent expense). The company allocates ofce department expenses to the operating departments in proportion to their sales. It expects the painting department to increase total ofce department expenses by $1DDD. Since the painting department will bring new customers into the store= management expects sales in both the clock and mirror departments to increase by 3%. No changes for those departments' gross prot percents or their direct expenses are expected except for store supplies used= which will increase in proportion to sales. Required Prepare departmental income statements that show the company's predicted results of operations for calendaryear 2913 for the three operating (selling) departments and their combined totals. [Round percents to the nearest onetenth and dollar amounts to the nearest whole dollarj 4. Williams Company began operations in January 2017 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. WILLIAMS COMPANY Departmental Income Statements For Year Ended December 31, 2017 Clock Mirror Combined Sales $130,000 $55,000 $185,000 Cost of goods sold 63,700 34.100 97,800 Gross profit 66,300 20,900 87,200 Direct expenses Sales salaries 20,000 7,000 27,000 Advertising 1,200 500 1,700 Store supplies used 900 400 1,300 Depreciation-Equipment 1.500 300 1,800 Total direct expenses 23,600 8,200 31,800 Allocated expenses Rent expense 7,020 3,780 10,800 Utilities expense 2,600 1,400 4,000 Share of office department expenses 10,500 4,500 15,000 Total allocated expenses 20,120 9.680 29,800 Total expenses 43,720 17 880 61,600 Net income $22,580 $3,020 $25,600 C Williams plans to open a third department in January 2018 that will sell paintings. Management predicts that the new department will generate $50,000 in sales with a 55% gross profit margin and will require the following direct expenses: sales salaries, $8,000; advertising, $800; store supplies, $500; and equipment depreciation, $200. It will fit the new department into the current rented space by taking some square foot-age from the3. A newly formed company has drawn up the following budgets for its first two accounting periods: Period I Period 2 Sales units 9,500 10,300 Production units (equivalent to normal capacity) 10,000 10,000 The following budgeted information applies to both periods: Selling price per unit $6.40 Variable cost per unit $3.60 Fixed production overhead per period $15,000 a) In period 1, compare the budgeted profit under both absorption costing and variable costing. b) In period 2, everything was as budgeted, except for the fixed production overhead, which was $15,700. How much would be the reported profit using absorption costing
