Answer:
1.
Jansen Company
Departmental Income Statement—Ski Department
For Year Ended 2019
Sales 610,000
Less : Cost of goods sold 435,000
Gross profit <u>175,000
</u>
Less; Expenses
Salaries 113,000
Utilities 15,600
Depreciation 54,400
Office expenses 29,600 <u>212,600</u>
Operating loss <u>$37,600</u>
<u></u>
2.
Jansen Company
Departmental Income Statement—Ski Department
For Year Ended 2019
Sales 610,000
Less : Cost of goods sold 435,000
Gross profit <u>175,000
</u>
Less; Direct Expenses
Salaries 88,000 (113,000 - 25,000)
Utilities 9,900 (15,600 - 5,700)
Depreciation 37,000 (54,400 - 17,400)
Total Direct Expenses <u>134,900</u>
Contribution to overhead <u>$40,100</u>
They should not eliminate the Ski Department because it would contribute $40,100 to overhead.
<u></u>
