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Vortex Company operates a retail store with two departments. Information about those departments follows Department ADepartment B Sales Cost of goods sold Direct expenses $812,806e
Vortex Company operates a retail store with two departments. Information about those departments follows Department ADepartment B Sales Cost of goods sold Direct expenses $812,806e 440,000 $457,200 297,180 Salaries Insurance Utilities Depreciation Maintenance 81,000 1e,800 28,000 14,00e 5,000 124,000 11,500 23,500 16,000 7,000 The company also incurred the following indirect costs $30,e00 7,000 16,000 41,e0e Salaries Insurance Depreciation Office expenses 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. Number of employees 60 40 Square footage 34, 30e 14,700 Department 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 0 0 Direct expenses Total direct expenses 0 Allocated indirect expenses Allocated indirect expenses 0 Total indirect expenses Operating income (loss) 2. Should Department B be eliminated? Yes No
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