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Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $806,400 470,000 Department B $453,600 294,840 Sales Cost of
Vortex Company operates a retail store with two departments. Information about those departments follows. Department A $806,400 470,000 Department B $453,600 294,840 Sales Cost of goods sold Direct expenses: Salaries Insurance Utilities Depreciation Maintenance 117,000 14,000 24,000 15,500 6,700 85,000 10,500 24,500 12,500 5,400 The company also incurred the following indirect costs. Salaries Insurance Depreciation Office expenses $28,000 7,000 15,400 44,000 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 33,600 Number of employees 77 33 B 14,400 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. Required 1 Required 2 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 VORTEX COMPANY Departmental Contribution Statements Department A Department B Direct expenses Total direct expenses Allocated indirect expenses Total direct expenses Allocated indirect expenses Total indirect expenses Operating income (loss) 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. Required 1 Required 2 ............................................. Should Department B be eliminated? Should Department B be eliminated?
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