The Menswear Department of Major's Department Store had sales of $188,000,cost of goods sold of $132,500,indirect expenses of $13,250,and direct expenses of $27,500 for the current period.The Menswear Department's contribution to overhead as a percent of sales is:
A)7.8%.
B)14.9%.
C)29.5%.
D)66.7%.
E)85.4%.

Question

Quizplus · Accepted Answer

The contribution to overhead can be calculated by subtracting the cost of goods sold and direct expenses from sales, and then subtracting indirect expenses. 
Contribution to overhead = Sales - Cost of goods sold - Direct expenses - Indirect expenses 
= $188,000 - $132,500 - $27,500 - $13,250 
= $14,750 
To find the contribution as a percentage of sales, we need to divide the contribution by sales and multiply by 100. 
Contribution to overhead as a percentage of sales = (Contribution to overhead / Sales) x 100 
= ($14,750 / $188,000) x 100 
= 7.85%
Therefore, the correct answer is option B) 14.9%.

The Menswear Department of Major's Department Store Had Sales of $188,000,cost