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Burton Co. Requests Assistance Allocating Costs

Burton Co. requests assistance allocating costs and determining the profitability of its two departments: Skis and Snowboards. Shared indirect expenses include rent and supervision. Use the Tableau Dashboard, with information from Burton’s December 31 year-end reports, for our analysis.

Compute gross profit for each department.

Allocate rent expense to each department.

Allocate each of the indirect expenses (rent and supervision) to the two departments: Skis and Snowboards.

Prepare departmental income statements for Skis and Snowboards.

Prepare a departmental contribution report that displays each department’s contribution to overhead.

Based on contribution to overhead, do we recommend the Snowboard department be closed?