Nesbit Co.has two operating (production)departments supported by a number of service departments.The following information was collected for a recent period:

Indirect costs are allocated as follows: salaries on the basis of sales,office expenses on the basis of the number of employees,and all other costs on the basis of square footage.Additional information about the production departments follows:
Sales for the Machining Department are $724,404 and sales for the Assembly Department are $356,796.Determine the departmental contribution to overhead and the departmental net income for each production department.

Question

Nesbit Co.has two operating (production)departments supported by a number of service departments.The following information was collected for a recent period:

Indirect costs are allocated as follows: salaries on the basis of sales,office expenses on the basis of the number of employees,and all other costs on the basis of square footage.Additional information about the production departments follows:
  Sales for the Machining Department are $724,404 and sales for the Assembly Department are $356,796.Determine the departmental contribution to overhead and the departmental net income for each production department.

Quizplus · Accepted Answer

The Answer of Nesbit Co.has two operating (production)departments supported by a number of service departments.The following information was collected for a recent period:

Indirect costs are allocated as follows: salaries on the basis of sales,office expenses on the basis of the number of employees,and all other costs on the basis of square footage.Additional information about the production departments follows:
  Sales for the Machining Department are $724,404 and sales for the Assembly Department are $356,796.Determine the departmental contribution to overhead and the departmental net income for each production department.

Nesbit CoHas Two Operating (Production)departments Supported by a Number of Service