Mong to another queston wil save this response uestion 2 Marian Corporation has

Question

Mong to another queston wil save this response uestion 2 Marian Corporation has two separato divisions that operate as proft centers The following information s evaiatble for the most recent year Black Division Navy Sales (net) alary expense (deect) ost of goods sold (direct $400,000 28,00 100 he Black Drvisuion occupies 20,000 sqare feet in the piant. The Navy Divsion a Compute departmental net income for the Black Dvnion b Compute departmental net income for the Navy Division c Compute departmontal contributon to overhead for the Black Division auare e Whsch measure, departmental net income or deparmental contribution to overhead is best und for ovaksating each divisor's manager and why? TTT Arial 3 (12pt)

Explanation / Answer

1 Net Income for Black Division Net Income = Sales - Cost of goods sold - Salary expenses - Rent Expenses Rent Expense for Black division = Area occupuied by Black division*rent expense/total area 20000*50000/(20000+30000) = 20000 Net Income = 200000 - 100000 - 28000 - 20000 = 52000 answer 2 Net Income for Navy Division Net Income = Sales - Cost of goods sold - Salary expenses - Rent Expenses Rent Expense for Navy division = Area occupuied by Black division*rent expense/total area 30000*50000/(20000+30000) =            30,000 Net Income = 400000-159000-48000-30000 =        1,63,000 answer 3 Departmental Contribution to overhead for the black division Contribution to overhead = Sales-COGS-Salary Expenses 200000 - 100000 - 28000 =            72,000 answer 4 Departmental Contribution to overhead for the Navy division 400000-159000-48000 =        1,93,000 answer 5 Which Measure is best? In comparison with contribution to overhead, net income measure is best in evaluating the performance as it includes indirect expenses of each division Please Let me know for further clarification.

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