Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. departmental contribution to common expenses certa

Departmental Contribution to Common Expenses Certain operating information is shown next for Harris Department Store:...

90.2K

Verified Solution

Question

Accounting

image Departmental Contribution to Common Expenses Certain operating information is shown next for Harris Department Store: The managers are disappointed with the operating results of department R. They do not believe that competition will permit raising prices; however, they believe that spending $10,000 more for promoting this department's products will increase the physical volume of products sold by 20%. An alternative is to discontinue department R and use the space to expand department S. It is believed that department S's physical volume of products sold can thus be increased 35%. Special sales personnel are needed, however, and department S's traceable expenses would increase by $48,000. Neither alternative would appreciably affect the total common departmental expense. Required a. Calculate the contribution now being made to common expenses by department R, by department S, and by the combination of other departments. b. Which of the two alternatives should management choose: increase promotional outlays for department R, or discontinue department R and expand department S? Support your answer with calculations

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students