Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $ 610,000 Cost of goods sold 435,000 Salaries 113,000 ($25,000 is indirect) Utilities 15,600 ($5,700 is indirect) Depreciation 54,400 ($17,400 is indirect) Office expenses 29,600 (all indirect) 1. Prepare a departmental income statement for 2019.2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?

Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $ 610,000 Cost of goods sold 435,000 Salaries 113,000 ($25,000 is indirect) Utilities 15,600 ($5,700 is indirect) Depreciation 54,400 ($17,400 is indirect) Office expenses 29,600 (all indirect) 1. Prepare a departmental income statement for 2019.2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $ 605,000 Cost of goods sold 430,000 Salaries 112,000 ($25,600 is indirect) Utilities 17,200 ($5,100 is indirect) Depreciation 45,000 ($17,100 is indirect) Office expenses 22,800 (all indirect) 1. Prepare a departmental income statement for 2019.2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?
Jansen Company reports the following for its Ski department for the year 2019. All of its costs are direct, except as noted. Sales . $605,000 Cost of goods sold . 425,000 Salaries . 112,000 ($15,000 is indirect) Utilities . $14,000 ($3,000 is indirect) Depreciation 42,000 ($10,000 is indirect) Office expenses . 20,000 (all indirect) Prepare a (1) departmental income statement for 2019 and (2) departmental contribution to overhead report for 2019. (3) Based on these two performance reports, should Jansen eliminate the Ski department?
Summarized data for 2019 (the first year of operations) for Gorman Products, In. are as follows Sales (70,000 units) $2,800,00 Production costs (80,000 units): Direct materials 880,000 Direct labor 720,000 Manufacturing overhead: Variable 544,000 Fixed 320,000 Operating expenses: Variable 175,000 Fixed 240,000 Depreciation on equipment 60,000 Real estate taxes 18,000 Personal property taxes (inventory and equipment 28,000 Personnel department expenses 30,000 a.) Prepare an income statement based on full absortion costing b) Prepare an income statement based on variable costing (I completed this, see attached spreadsheet. I just need help on a, c, and d) c) Assume that you must decide quickly whether to accept a special one-time order for 1000 units for $25 per unit. Which income statement presentthe most relevant data? Determine the apparent profit or loss on the special order based solely on these data. d) If the…
Williams Company began operations in January 2019 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. WILLIAMS COMPANYDepartmental Income StatementsFor Year Ended December 31, 2019 Clock Mirror Combined Sales $ 170,000 $ 95,000 $ 265,000 Cost of goods sold 83,300 58,900 142,200 Gross profit 86,700 36,100 122,800 Direct expenses Sales salaries 22,000 7,000 29,000 Advertising 1,700 500 2,200 Store supplies used 1,000 300 1,300 Depreciation—Equipment 1,700 400 2,100 Total direct expenses 26,400 8,200 34,600 Allocated expenses Rent expense 7,030 3,780 10,810 Utilities expense 2,800 2,500 5,300 Share of office department expenses 11,000 10,500 21,500 Total allocated expenses 20,830 16,780 37,610 Total expenses…
Operating results for Division A of Alpha Company during 2019 are as follows: Sales $480,000 Cost of goods sold 297,600 Gross profit 182,400 Direct expenses 32,400 Common expenses 54,000 Total expenses 86,400 Net income $96,000 If Division A would maintain the same quantity of product sold while raising selling prices by 6% and making additional advertising expenditures of $36,000, what would be the effect on the Division’s net income? (Ignore income taxes in your calculations.) Select one: a. Net income would decrease by $7,200 b. Net income would increase by $28,800 c. Net income would increase by $36,000 d. Net income would decrease by $28,800 e. Net income would increase by $7,200
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Analyzing Operational ChangesOperating results for department B of Shaw Company during 2019 are as follows: Sales $800,000 Cost of goods sold 480,000 Gross profit 320,000 Direct expenses 200,000 Common expenses 123,000 Total expenses 323,000 Net loss $(3,000) If department B could maintain the same physical volume of product sold while raising selling prices an average of 6% and making an additional advertising expenditure of $40,000, what would be the effect on the department’s net income or net loss? (Ignore income tax in your calculations.) Use a negative sign with your answer to indicate if the effect increases the company's net loss. If Department B increased its selling price by 6%, the effect on net income (loss) would be $Answer
Spades Company provided the following information for the year ended December 31, 2022: Sales 8,000,000Sales salaries 520,000Advertising 120,000Indirect labor 600,000Delivery expense 160,000Freight in 80,000Depreciation – machinery 50,000Factory taxes 130,000Purchases 1,600,000Direct labor 1,480,000Factory supplies expense 120,000Office supplies expense 30,000Office salaries 800,000Factory superintendence 480,000Doubtful accounts 100,000Factory maintenance 150,000Factory heat, light and power 220,000Income tax expense 170,000 Doubtful accounts are common costs allocated to administrative expenses and selling expense equally. Inventory balancesat the end of the fiscal period as compared with balances at the beginning of the fiscal period were as follows: Finished goods 200,000 IncreaseGoods in process 90,000 IncreaseRaw materials 100,000 Decrease Tax rate is 30%. 1. What is the amount of cost of goods sold for the current period?2. What is the amount of general and administrative…
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Sales	$	610,000
Cost of goods sold		435,000
Salaries		113,000	($25,000 is indirect)
Utilities		15,600	($5,700 is indirect)
Depreciation		54,400	($17,400 is indirect)
Office expenses		29,600	(all indirect)