6.) A food department reported sales revenue of $128,800 and direct costs of $68,200 during March....

6.) A food department reported sales revenue of $128,800 and direct costs of $68,200 during March. Determine the following:

a. What is the department’s contributory income?

b. What is contributory income as a percentage of sales revenue?

7.) A department has two operating divisions: Food service with sales revenue of $880,000 and a bar-lounge with sales revenue of $440,840. Calculate the sales revenue of each division as a percentage of total departmental sales revenue.

9.) Indirect, undistributed costs of $14,000 are to be allocated to two departments. Department “1” occupies 54% and department “2” occupies 46% of the total square footage available. Calculate the amount to be allocated to each department based on the square footage method.

10.) A department with three operating divisions reported the sales revenues for each of its divisions. Determine the percentage of sales revenue provided by each division:

Rooms division $1,555,632

Food service division 921,856

Beverage division 403,312

Total sales revenue $2,880,800

Solutions

Expert Solution

Solution to Question 6:

Sales Revenue	$128,800
Less: Direct Costs	$68,200
a. Contributory income	$60,600
b. Contributory income as % of Sales	47.05%

Solution to Question 7:

	figures in $	% of total departmental sales revenue
Food Service - Sales revenue	880,000	66.62%
Bar Lounge - Sales revenue	440,840	33.38%
Total departmental sales revenue	1,320,840	100.00%

Solution to Question 9:

Calculation of indirect costs to be allocated to each department based on the square footage method:

Indirect undistributed cost allocated to Department "1" = $14,000 * 54% (As 54% space is occupied by Department 1)

= $7,560

Indirect undistributed cost allocated to Department "2" = $14,000 * 46% (As 46% space is occupied by Department 2)

= $6,440

Solution to Question 10:

	figures in $	% of total departmental sales revenue
Rooms Division - Sales revenue	1,555,632	54.00%
Food service Division - Sales revenue	921,856	32.00%
Beverage Division - Sales revenue	403,312	14.00%
Total departmental sales revenue	2,880,800	100.00%

ekkarill92 answered 1 year ago

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