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Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $812,800 450,000 Department B $457,209 297,180 Sales Cost of
Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $812,800 450,000 Department B $457,209 297,180 Sales Cost of goods sold Direct expenses Salaries Insurance Utilities Depreciation Maintenance 120,000 12,000 21,500 17,000 6,199 83,000 10,600 24,000 12,500 5,500 The company also incurred the following indirect costs Salaries Insurance Depreciation office expenses $28,000 6,800 16.000 44,000 $ 812,8005 457,200 450,000 297,180 362,800 160,020 Sales Cost of goods sold Gross profit Direct expenses Salaries Insurance Utilities Depreciation Maintenance 120,000 12,000 21,500 17,000 6.100 83,000 10,600 24,000 12,500 5,500 176,600 135,600 Total direct expenses Departmental contributions to overhead Allocated indirect expenses Salaries Insurance Depreciation Share of office dept. expenses Total Indirect expenses Operating income (loss) 0 2. Should Department B be eliminated? Yes
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