Question

Ultimo Co. operates three production departments as profit centers. The following information is available for its most recent year. Department 2's contribution to overhead in dollars is:
Dept.
Sales Cost of
Goods Sold Direct
Expenses Indirect
Expenses
1 $1,000,000 $700,000 $100,000 $80,000
2 400,000 150,000 40,000 100,000
3 700,000 300,000 150,000 20,000
a.$210,000.

b.$350,000.

c.$10,000.

d.$260,000.

e.$150,000.

Answer 1

Answer:

None of the available options are correct.

Department 2's contribution to overhead in dollars is $210,000

Explanation:

Contribution to overhead = Sales - Cost of goods sold - Direct expenses

Contribution to overhead = $400,000 - $150,000 - $40,000

Contribution to overhead = $210,000