Question: 1. An income statement showing departmental contribution to overhead,
(a) subtracts indirect expenses from each department's revenues,
(b) subtracts only direct expenses from each department's revenues, or
(c) shows net income for each department.
2. Are the reports of departmental net income and the departmental contribution to overhead useful in assessing a department manager's performance? Explain.
3. Performance reports to evaluate managers should
(a) include data about controllable expenses,
(b) compare actual results with budgeted levels, or
(c) both (a) and (b).