Complete the below problem using \"EXCEL\", as well as using formulas through \"

Question

Complete the below problem using "EXCEL", as well as using formulas through "EXCEL". Explain part 2 giving reason as to how you concluded that.

Problem 22-4B Departmental contribution to income P3 Sadar Company operates a store with two departments: videos and music. Information about those departments follows. Sales .. Cost of goods sold Direct expenses Videos Department $370,500 320,000 Music Department $279,500 175,000 Salaries Maintenance. Utilities. Insurance 35,000 2,000 5,000 4,200 25,000 10,000 4,500 3,700 The company also incurred the following indirect costs Advertising Salaries Office expenses .$15,000 .27,000 3,200 Indirect costs are allocated as follows: advertising on the basis of sales; salaries on the basis of number of employees; and office expenses on the basis of square footage. Additional information about the departments follows. Square footage 5,000 3,000 Department Number of employees Videos Music Required 1. For each department, determine the departmental contribution to overhead and the departmental net income. 2. Should the video department be eliminated? Explain. Check (1) Music dept. net income, $42,850

Explanation / Answer

VIDEOS DEPARTMENT MUSIC DEPARTMENT EMPLOYEES 3 2 SQUARE FOOTAGE 5000 3000 1 2 VIDEOS DEPARTMENT MUSIC DEPARTMENT A SALES 370500 279500 B COST OF GOODS SOLD -320000 -175000 C 50500 104500 DIRECT EXPENSES     SALARIES 35000 25000    MAINTENANCE 12000 10000    UTILITIES 5000 4500    INSURANCE 4200 3700 D TOTAL DIRECT COSTS 56200 43200 E CONTRIBUTION -5700 61300 (C-D) INDIRECT COSTS    ADVERTISING 8550 6450         (15000*A)/(A1+A2) (15000*370500)/ (150000*279500)/ (370500+279500) (370500+279500)    SALARIES 16200 10800        27000*DEPT EMPLOYEES/ 27000*3/(3+2) 27000*2/(3+2)        TOTAL EMPLOYEES    OFFICE EXPENSES 2000 1200        3200*DEPT SQ FOOT/ 3200*5000/(5000+3000) 3200*3000/(3000+5000)        TOTAL SQUARE FOOT F TOTAL INDIRECT COSTS 26750 18450 NET INCOME (E-F) -32450 42850 THE VIDEO DEPARTMENT SHOULD BE ELIMINATED AS CONTRIBUTION IS NEGATIVE

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.