Question :
168.Nesbit Co. has two operating (production) departments supported by a : 1258708
168.Nesbit Co. has two operating (production) departments supported by a number of service departments. The following information was collected for a recent period:
Direct CostsIndirect Cost
Machining DepartmentAssembly Department
Salaries$122,400$85,700$36,700
Insurance 20,20011,0005,500
Utilities 23,90013,9002,000
Depreciation 20,70011,50013,800
Maintenance 7,0004,70029,400
Office expenses -0- -0- 71,100
Cost of goods sold 327,600121,200
Indirect costs are allocated as follows: salaries on the basis of sales, office expenses on the basis of the number of employees, and all other costs on the basis of square footage. Additional information about the production departments follows:
Square FootageNumber of Employees
Machining14,53578
Assembly4,84552
Sales for the Machining Department are $724,404 and sales for the Assembly Department are $356,796. Determine the departmental contribution to overhead and the departmental net income for each production department.
169.Holliday, Inc., operates a retail store with two departments, A and B. Its departmental income statement for the current year follows:
Holliday, Inc.Departmental Income StatementFor Year Ended December 31
Dept. ADept. BCombined
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-Building10,00011,76021,760
Maintenance1,6001,7003,300
Utilities6,2006,32012,520
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
Holliday 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.)
170.Williams Co. operates three separate departments (R, S, T). The data below is provided for the current year:
Total Sales$120,000 ($40,000 from each department)
Cost of Goods Sold$80,000 (50% from R; 25% from S; 25% from T)
Direct Expense$26,000 ($6,000 from R; $12,000 from S; $8,000 from T)
Indirect Expenses$9,000
Required: Prepare an income statement showing the departmental contributions to overhead for the current year. 171.The following data is available for the Janitorial Services Department of Glitterol Co.
Revenues$216,000
Cost of Sales168,000
Expenses:
Supplies-Direct12,000
Salaries-Indirect Allocated34,000
Rent-Direct8,000
Rent-Indirect Allocated4,500
Required: Calculate departmental contribution to overhead for the Janitorial Services Department, including the department’s contribution as a percentage of revenues.
