133. Burien, Inc. operates a retail store with two departments, A and B. Its departmental income statement for the current year follows:
BURIEN, INC.
Departmental Income Statement
For Year Ended December 31
Dept. A
Dept. B
Combined
Sales
$180,000
$200,000
$380,000
Direct expenses
129,900
142,870
272,770
Contributions to overhead
$ 50,100
$ 57,130
$107,230
Indirect expenses:
Depreciation--building
10,000
11,760
21,760
Maintenance
1,600
1,700
3,300
Utilities
6,200
6,320
12,520
Office expenses
1,800
2,000
3,800
Total indirect expenses
$ 19,600
$ 21,780
$ 41,380
Net income
$ 30,500
$ 35,350
$ 65,850
Burien allocates building depreciation, maintenance, and utilities on the basis of square footage. Office expenses are allocated on the basis of sales.Management is considering an expansion to a three-department operation. The proposed Department C would generate $120,000 in additional sales and have a 17.5% contribution to overhead. The company owns its building. Opening Department C would redistribute the square footage to each department as follows: A, 19,040; B, 21,760 sq. ft.; C, 13,600. Increases in indirect expenses would include: maintenance, $500; utilities, $3,800; and office expenses, $1,200.Complete the following departmental income statements, showing projected results of operations for the three sales departments. (Round amounts to the nearest whole dollar.)
Dept. C
_______
Indirect expenses
Depreciation–building
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