Garcia Company has two operating departments (Phone and Earbuds) and one service department (Office). Its departmental income statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses. Sales Cost of goods sold Gross profit Expenses Sales salaries Supplies used Depreciation-Equipment Rent Utilities Share of office department expenses Total expenses Income GARCIA COMPANY Departmental Income Statements For Year Ended December 31 Phone $ 220,000 107,800 112, 200 Gross profit Direct expenses Required: Prepare a departmental contribution to overhead report. 22,500 950 1,500 7,840 2,900 13,000 47,890 $ 64,310 Garcia Company Departmental Contribution to Overhead For Year Ended December 31 Phone Total direct expenses Departmental contribution to overhead Earbuds $ 85,000 52,700 32,300 7,500 750 708 3,840 2,500 6,508 21,790 $ 10,510 Earbuds Combined Combined $ 305,000 160,500 144,500 30,000 1,700 2,200 10,880 5,400 19,500 69,688 $ 74,828
Garcia Company has two operating departments (Phone and Earbuds) and one service department (Office). Its departmental income statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses. Sales Cost of goods sold Gross profit Expenses Sales salaries Supplies used Depreciation-Equipment Rent Utilities Share of office department expenses Total expenses Income GARCIA COMPANY Departmental Income Statements For Year Ended December 31 Phone $ 220,000 107,800 112, 200 Gross profit Direct expenses Required: Prepare a departmental contribution to overhead report. 22,500 950 1,500 7,840 2,900 13,000 47,890 $ 64,310 Garcia Company Departmental Contribution to Overhead For Year Ended December 31 Phone Total direct expenses Departmental contribution to overhead Earbuds $ 85,000 52,700 32,300 7,500 750 708 3,840 2,500 6,508 21,790 $ 10,510 Earbuds Combined Combined $ 305,000 160,500 144,500 30,000 1,700 2,200 10,880 5,400 19,500 69,688 $ 74,828
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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
Transcribed Image Text:Garcia Company has two operating departments (Phone and Earbuds) and one service department (Office). Its departmental income
statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses.
Sales
Cost of goods sold
Gross profit
Expenses
Sales salaries
Supplies used
Depreciation Equipment
Rent
Utilities
Share of office department expenses
Total expenses
Income
GARCIA COMPANY
Departmental Income Statements
For Year Ended December 31
Phone
$ 220,000
107,800
112, 200
Gross profit
Direct expenses
Required:
Prepare a departmental contribution to overhead report.
Garcia Company
Departmental Contribution to Overhead
For Year Ended December 31
Total direct expenses
Departmental contribution to overhead
1,500
7,040
2,900
13,000
47,890
$ 64,310
Phone
22,500
950
Earbuds
Earbuds
$ 85,000
52,700
32,300
7,500
750
708
3,840
2,500
6,508
21,790
$ 10,510
Combined
Combined
$ 305,000
160,500
144,500
30,000
1,700
2,200
10,880
5,400
19,500
69,680
$ 74,820
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