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Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $825,500 415,000 Department B $444,500 288,925 Sales Cost of
Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $825,500 415,000 Department B $444,500 288,925 Sales Cost of goods sold Direct expenses Salaries Insurance Utilities Depreciation Maintenance 121,000 13,000 23,000 20,000 6,900 82,000 10,600 25,500 13,500 5,800 The company also incurred the following indirect costs. Salaries Insurance Depreciation Office expenses $28,000 6,200 14,200 48,000 Indirect costs are allocated as follows: salaries on the basis of sales; insurance and depreciation on the basis of square footage, and office expenses on the basis of number of employees. Additional information about the departments follows. Department Number of employees Square footage 30,800 13,200 66 44 Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and Department B. (Do not round intermediate calculations. Round your final answers to nearest whole dollar.) VORTEX COMPANY Departmental Contribution Statements Department A Department B Direct expenses Total direct expenses Allocated indirect expenses Total indirect expenses Operating income (loss) 0 0s 2. Should Department B be eliminated? Yes No
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