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Mayfield Retailers Has Departments a and B with Departmental Income

question 18

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Mayfield Retailers has departments A and B with departmental income statements as follows:  Department A  Department B  Net sales $70000$50000 Cost of sales 3000020000 Other Expenses 1300031000 Profit (Loss)  $27000($1000) \begin{array}{|l|r|r|}\hline & \text { Department A } & \text { Department B } \\\hline \text { Net sales } & \$ 70000 & \$ 50000 \\\hline \text { Cost of sales } & 30000 & 20000 \\\hline \text { Other Expenses } & 13000 & 31000 \\\hline \text { Profit (Loss) } & \$ 27000 & (\$ 1000) \\\hline\end{array} Mayfield is considering eliminating Department B.Of the total 'other expenses' for the two departments of $44 000,$32 000 are fixed general overhead expenses and the rest are variable expenses based on 10% of sales.What is the present departmental contribution of Department B?


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