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Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $825,600 455,000 Department B $464,400 301,860 Sales Cost of
Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $825,600 455,000 Department B $464,400 301,860 Sales Cost of goods sold Direct expenses: Salaries Insurance Utilities Depreciation Maintenance 119,000 10,000 21,000 20,500 6,100 84,000 10,700 29,000 13,500 5,000 The company also incurred the following indirect costs. Salaries Insurance Depreciation Office expenses $28,000 6,800 14,200 47,000 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 32,200 13,800 Number of employees 66 44 B Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and Department B. 2. Should Department B be eliminated? Complete this question by entering your answers in the tabs below.
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