Question

a department reports sales of $1,270,000 and cost of goods sold of $892,000. its direct expenses include salaries of $230,000 and depreciation on equipment of $90,000. the department is also allocated $46,000 of service department expenses. prepare a departmental contribution to overhead report.

Answer 1

To prepare a departmental contribution to overhead report, we need to calculate the departmental direct expenses, allocate service department expenses, and then calculate the departmental contribution to overhead.

Step-by-step explanation:

To prepare a departmental contribution to overhead report, we need to calculate the departmental direct expenses, allocate service department expenses, and then calculate the departmental contribution to overhead.

The departmental direct expenses include salaries and depreciation, which amount to $230,000 + $90,000 = $320,000. The allocated service department expenses are $46,000.

To calculate the departmental contribution to overhead, we subtract the departmental direct expenses and the allocated service department expenses from the sales revenue: $1,270,000 - ($320,000 + $46,000) = $904,000.