The Ski department reports sales of $630,000 and cost of goods sold of $441,000. Its expenses follow. Direct expenses Indirect expenses Service department expenses $ 22,200 Salaries Depreciation $ 120,000 Rent 54,400 $ 17,000 Office 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?
The Ski department reports sales of $630,000 and cost of goods sold of $441,000. Its expenses follow. Direct expenses Indirect expenses Service department expenses $ 22,200 Salaries Depreciation $ 120,000 Rent 54,400 $ 17,000 Office 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Ski department reports sales of $630,000 and cost of goods sold of $441,000. Its expenses follow.
Direct expenses
Indirect expenses
Service department expenses
$ 22,200
Salaries
Depreciation
$ 120,000 Rent
54,400
$ 17,000 Office
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?
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