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Please solve with showing how Please complete the Problem as follows: Sadar Company operates a store with two departments: videos and music. Information about those
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Please complete the Problem as follows: Sadar Company operates a store with two departments: videos and music. Information about those departments follows. Videos Department Music Department Sales 370,500 $ 279,500 Cost of goods sold 320,000 175,000 Direct expenses Salaries 35,000 25,000 Maintenance 11,000 10,000 Utilities 5,000 4,500 Insurance 4,200 3,700The company also incurred the following indirect costs. Advertising 15,000 Salaries 27,000 Office expenses 3,200 Indirect costs are allocated as follows: advertising on the basis of sales; salaries on the basis of number of employees; and office expenses on the basis of square footage. Additional information about the department follows. Department Square footage # of employees Videos 5,000 N W Music 3,000 Required 1) For each department, determine the departmental contribution to overhead and the departmental net income. 2) Should the video department be eliminated? Explain. Check: (1) Music department net income, $42,850Step by Step Solution
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