Solution-Calculate departmental direct operating margin

Calculate departmental direct operating margin percentages

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Reference no: EM132724484

Problem - Durwood Thomas operates the business Thomas Security that sells security equipment for commercial property and residential homes. The following information is provided for the year ended December 31, 20--:

	Commercial Property		Residential Homes
Net sales	$465,000		$135,000
Cost of goods sold	279,250		54,000
Direct operating expenses:
Advertising expense	35,000		20,000
Store clerks' wages expense	30,000		18,000
Truck drivers' wages expense	15,000		15,000
Bad debt expense	8,000		3,000
Depreciation expense-delivery equipment	6,000		4,000
Other operating expenses	20,000		10,000

Indirect operating expenses:
Store clerks' wages expense		$10,000
Advertising expense		15,000
Store rent expense		20,000
Other operating expenses		10,000

Required -

1. Prepare an income statement showing departmental direct operating margin and total operating income.

2. Calculate departmental direct operating margin percentages.

Reference no: EM132724484

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Calculate departmental direct operating margin percentages

Reference no: EM132724484

Reference no: EM132724484

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