The Following Data Are Available for the Cleaning Services Department

question 48

Essay

The following data are available for the Cleaning Services Department of Amitol Co.
$\begin{array}{lr}\text { Revenues } & \$ 216,000 \\\text { Cost of sales } & 168,000 \\\text { Expenses: } & \\\text { Supplies-direct } & 12,000 \\\text { Salaries-indirect allocated } & 34,000 \\\text { Rent-direct } & 8,000 \\\text { Rent-indirect allocated } & 4,500\end{array}$ Required: Calculate departmental contribution to overhead for the Cleaning Services Department, including the department's contribution as a percentage of revenues.

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Definitions:

Lot Size

The quantity of goods processed, transported, or ordered at one time, affecting costs, efficiency, and inventory management.

Optimal Lot Size

The most economically advantageous quantity of a product to order or produce, balancing between ordering costs and holding costs.

Economic Order Quantity

A formula used to determine the most cost-effective quantity of inventory to order, balancing the costs of ordering and holding stock.

Optimal Order Quantity

The most efficient amount of stock to order that minimizes total inventory costs, including ordering and holding costs.