The Ski department reports sales of $620,000 and cost of goods sold of $434,000. Its expenses follow. Service department expenses Office $ 24,400 Direct expenses Salaries Depreciation Indirect expenses $ 116,000 Rent 48,400 $ 15,100 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 Skl department be eliminated?
The Ski department reports sales of $620,000 and cost of goods sold of $434,000. Its expenses follow. Service department expenses Office $ 24,400 Direct expenses Salaries Depreciation Indirect expenses $ 116,000 Rent 48,400 $ 15,100 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 Skl department be eliminated?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Skl department reports sales of $620,000 and cost of goods sold of $434,000. Its expenses follow.
Service department expenses
$ 24,400
Direct expenses
Salaries
Depreciation
Req 1
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
Skl department be eliminated?
$ 116,000 Rent
48,400
Complete this question by entering your answers in the tabs below.
Indirect expenses
Gross profit
Expenses
Req 2 and 3
For Year Ended December 31
Total expenses
Income (loss)
For the Ski department only, prepare a departmental income statement.
Departmental Income Statement
$ 15,100 Office
Ski Department
< Req 1
Req 2 and 3 >
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