Question
In: Accounting
Mach Co. operates three manufacturing departments as profit centers. The following information is available for its...
|
Mach Co. operates three manufacturing departments as profit centers. The following information is available for its most recent year: |
| Dept. | Sales | Cost of goods sold |
Direct expenses |
Indirect expenses |
| 1 | $1,100,000 | $735,000 | $110,000 | $85,000 |
| 2 | 430,000 | 156,500 | 40,200 | 105,000 |
| 3 | 710,000 | 305,000 | 165,000 | 21,000 |
|
Which department has the greatest departmental contribution to overhead and what is the amount contributed? |
Group of answer choices
Dept. 3; $430,000
Dept. 1; $255,000
Dept. 2; $110,000
Dept. 3; $240,000
Dept. 2; $156,500
Solutions
Expert Solution
| Department | |||
| 1 | 2 | 3 | |
| Sales | $ 1,100,000 | $ 430,000 | $ 710,000 |
| COGS | 735,000 | 156,500 | 305,000 |
| Gross Profit | $ 365,000 | $ 273,500 | $ 405,000 |
| Direct Expenses | 110,000 | 40,200 | 165,000 |
| Departmental Contribution | $ 255,000 | $ 233,300 | $ 240,000 |
| So greatest contribution is made by department 1 of $255,000, Option 2 is correct. | |||
ekkarill92 answered 2 years agoRelated Solutions
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