Vortex Company operates a retail store with two departments. Information about those departments follows.

	Department A			Department B
Sales	$	800,000		$	450,000
Cost of goods sold		497,000			291,000
Direct expenses
Salaries		125,000			88,000
Insurance		20,000			10,000
Utilities		24,000			14,000
Depreciation		21,000			12,000
Maintenance		7,000			5,000

The company also incurred the following indirect costs.

Salaries	$36,000
Insurance	6,000
Depreciation	15,000
Office expenses	50,000

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	Square footage	Number of employees
A	28,000	75
B	12,000	50

2.

Should Department B be eliminated?

	Yes
	No

Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and the departmental net income and Department B. VORTEX COMPANY Departmental Contribution Statements Department A DepartmentEB Diect expenses Total direct expenses Allocated indirect expenses Total indirect expenses Operating income (loss)