Ultimo Co. operates three production departments as profit centers. The following information is available for its most recent year. Department 2's contribution to overhead in dollars is: $\begin{array}{rrrrr}
&&&&\text { Indirect }\
\text { Dept.} &\text {Sales } & \text { Cost of Goods Sold}&\text { Direct Expenses}&\text { Expenses }\
1 & \$ 1,000,000 & \$ 700,000 & \$ 100,000 & \$ 80,000 \
2 & 400,000 & 150,000& 40,000 & 100,000 \
3 & 700,000 & 300,000 & 150,000 & 20,000
\end{array}$

A) $210,000.
B) $350,000.
C) $10,000.
D) $260,000.
E) $150,000.

Question

Ultimo Co. operates three production departments as profit centers. The following information is available for its most recent year. Department 2's contribution to overhead in dollars is: $\begin{array}{rrrrr}
&&&&\text { Indirect }\
\text { Dept.} &\text {Sales } & \text { Cost of Goods Sold}&\text { Direct Expenses}&\text { Expenses }\
1 & \$ 1,000,000 & \$ 700,000 & \$ 100,000 & \$ 80,000 \
2 & 400,000 & 150,000& 40,000 & 100,000 \
3 & 700,000 & 300,000 & 150,000 & 20,000
\end{array}$

A) $210,000.
B) $350,000.
C) $10,000.
D) $260,000.
E) $150,000.

Quizplus · Accepted Answer

Department 2's contribution to overhead is calculated as Sales - Cost of Goods Sold - Direct Expenses = $400,000 - $150,000 - $40,000 = $210,000.

Ultimo Co Operates Three Production Departments as Profit Centers A) $210,000