Question

11. Kite Corp. has three departments (X, Y, and z). Data below is reported for the mos current year: Total Sales $144,000 ($48,000 from each department) Cost of Goods Sold $100,000 (30% Dept. X; 40% Dept. Y; 30% Dept. 2) Direct Expenses $ 30,000 ($10,000 Dep. X $11,000 Dept. Y; $9,000 Dept. Z) Indirect Expenses $ 109,000 (one-third to each department) Prepare Departmental Contribution Statements and indicate which departments, if any, should be considered for elimination. Kite Corp Departmental Contribution Statements For the year ended January 31, 2019 Dept x Dept Y Dept Z in wollolt otsust in 1992bo sidst on behizsisto oohsrillo 2 sio Which segment should be considered for elimination?

Answer 1

Sales Cost of Goods Sold Direct Expenses Departmental Contribution KITE CORP Dept X Dept Y Dept Z $ 48,000.00 $ 48,000.00 $ 48,000.00 $ 30,000.00 $ 40,000.00 $30,000.00 $ 10,000.00 $ 11,000.00 $ 9,000.00 $ 8,000.00 $ -3,000.00 $ 9,000.00 Department Y should be considered for elimination. *Indirect expenses should not be considered because they are not department specific. 12 (a) Variable cost per unit Direct Material $ Direct Labor $ Variable factory overhead $ Variable S & A Overhead $ Variable cost per unit $ 6.00 11.00 2.50 1.00 20.50 12(b) Total Desired Profit Desired rate of return Total assets Total Desired Profit 30% $6,85,000.00 $ 2,05,500.00 12 (c) Markup % Total desired profit Total Cost Markup % $2,05,500.00 $ 4,65,000.00 44% 12 (d) Total Selling price Total desired profit Total Cost Total Sales revenue Number of units Selling price per unit $ 2,05,500.00 $4,65,000.00 $6,70,500.00 20000 $ 33.53