Problem - Jansen Company reports the following for its ski department for the year 2015. All of its costs are direct, except as noted.
Sales - $ 600,000
Cost of goods sold - 445,000
Salaries - 112,000 ($25,600 is indirect)
Utilities - 14,800 ($5,400 is indirect)
Depreciation - 54,000 ($17,300 is indirect)
Office expenses - 26,400 (all indirect)
Required -
1. Prepare a department income statement for 2015.
2. Prepare a department contribution to overhead report for 2015.
3. Based on these two performance reports, should Jansen eliminate the ski department?