Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

تمرين 62

Sadar Company operates a store with two departments: videos and music. Information about those departments follows.

The company also incurred the following indirect costs.

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.

Required
1. For each department, determine the departmental contribution to overhead and the departmental net income.
2. Should the video department be eliminated Explain.