Chapter 9, Problem 7E

Jansen Company reports the following for its ski department for the year 2015. All of its costs are direct, except as noted.

Sales…………………………….	$605,000
Cost of goods sold……….	425,000
Salaries……………………….	112,000($ 15,000 is indirect)
Utilities………………………	14,000($ 3,000 is indirect)
Depreciation………………	42,000($ 10,000 is indirect)
Office expenses………….	20,000(all indirect)

Prepare a (1) departmental income statement for 2015 and (2) departmental contribution to overhead report for 2015. (3) Based on these two performance reports, should Jansen eliminate the ski department?