CR Jansen Company reports the following for its ski department for the year 2017

Question

CR Jansen Company reports the following for its ski department for the year 2017. All of its costs are direct, except as noted Sales Cost of goods sold Salaries Utilities Depreciation Office expenses $605,000 425,000 112,000 ($15,000 is indirect) 14,000 (S3,000 is indirect) 42,000 ($10,000 is 20,000 (all indirect) es 1. Prepare a departmental income statement for 2017 2. & 3. Prepare a departmental contribution to overhead report for 2017. Based on these two performance reports, should Jansen eliminate the ski department? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3

Explanation / Answer

1 Sales 605000 Cost of goods sold 425000 Gross Profit 180000 Operating expenses Salaries 112000 Utilities 14000 Depreciation 42000 Office expenses 20000 Operating loss -8000 2 Sales 605000 Cost of goods sold 425000 Gross Profit 180000 Direct expenses Salaries 97000 Utilities 11000 Depreciation 32000 Contribution to overhead 40000 Should Jansen eliminate the Ski department No

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