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

	Department A			Department B
Sales	$	838,500		$	451,500
Cost of goods sold		485,000			293,475
Direct expenses:
Salaries		115,000			88,000
Insurance		12,000			11,000
Utilities		23,000			27,500
Depreciation		20,000			12,500
Maintenance		6,600			5,000

The company also incurred the following indirect costs.

Salaries	$30,000
Insurance	7,400
Depreciation	16,000
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		30,100			66
B		12,900			44

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?

Read carefully, thank you

38 VORTEX COMPANY Departmental Contribution Statements Department A Department B 1.96 points 0 0 Skipped Direct expenses eBook References Total direct expenses 0 0 Allocated indirect expenses 0 0 Total indirect expenses Operating income (loss) S 0 $ 0