Answer:
Department 2 has the highest Contribution To Overhead and its dollar amount is $ 260,000
Explanation:
Ultimo Co.
Dept. 1 2 3
Sales $ 1,000,000 $ 400,000 $ 700,000
<u>Cost of Goods Sold 700,000 150,000 300,000 </u>
Contribution Margin 300,000 300,000 400,000
Direct Expenses 100,000 40,000 150,000
Indirect Expenses $ 80,000 100,000 20,000
Contribution To Overhead 200,000 260,000 250,000
Contribution To Overhead Calculations
Department 1= Contribution Margin - total direct Expenses
= 300,000-100,000=200,000
Department 2=Contribution Margin - total direct Expenses
=300,000-40,000= 260,000
Department 3=Contribution Margin - total direct Expenses
=400,000-150,000= 250,000
