The Ski department reports sales of $625,000 and cost of goods sold of $437,500. Its expenses follow. Direct expenses Indirect expenses $ 16,600 Service department expenses Office $ 21,000 Salaries Depreciation $ 120,000 Rent 54,400 1. For the Ski department only, prepare a departmental income statement. 2. & 3. For the Ski department only, prepare a departmental contribution to overhead report. Based on these two reports, should the Ski department be eliminated? Complete this question by entering your answers in the tabs below.
The Ski department reports sales of $625,000 and cost of goods sold of $437,500. Its expenses follow. Direct expenses Indirect expenses $ 16,600 Service department expenses Office $ 21,000 Salaries Depreciation $ 120,000 Rent 54,400 1. For the Ski department only, prepare a departmental income statement. 2. & 3. For the Ski department only, prepare a departmental contribution to overhead report. Based on these two reports, should the Ski department be eliminated? Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Ski department reports sales of $625,000 and cost of goods sold of $437,500. Its expenses follow.
Direct expenses
Indirect expenses
$ 16,600
Service department expenses
Office
$ 21,000
Salaries
Depreciation
1. For the Ski department only, prepare a departmental income statement.
2. & 3. For the Ski department only, prepare a departmental contribution to overhead report. Based on these two reports, should the Ski
department be eliminated?
Complete this question by entering your answers in the tabs below.
Req 1
$ 120,000 Rent
54,400
For the Ski department only, prepare a departmental income statement.
Departmental Income Statement
Gross profit
Expenses
Req 2 and 3
For Year Ended December 31
Total expenses
Income (loss)
Ski Department
< Req 1
Req 2 and 3 >
Transcribed Image Text:Req 1
Req 2 and 3
For the Ski department only, prepare a departmental contribution to overhead report. Based on these two reports, should the
Ski department be eliminated?
Departmental Contribution to Overhead
For Year Ended December 31
Gross profit
Direct expenses
Total direct expenses
Departmental contribution to overhead
Should the Ski department be eliminated?
Ski Department
<
Req 1
Req 2 and 3>
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