The Yard Shop sells plants fertilizers and other garden

products #8004
The Yard Shop sells plants, fertilizers, and other garden products. The store has three
departments: plants, chemicals, and tools. Certain information about the revenues and
expenses of the departments for the year ended December 31, 2016, follows. Indirect expenses
have been allocated on bases similar to those discussed and illustrated in the
text:INSTRUCTIONS1. Prepare a departmental income statement showing the contribution
margin and the net profit for each department.2. Based solely on accounting information, would
you recommend that any departments be closed? Explain.3. What information, other than
accounting data, would you suggest the owners consider in deciding whether to close any
departments?Analyze:If the indirect expenses had been allocated on the basis of net sales,
what conclusions would you draw about the viability of each department? Explain.View Solution:
The Yard Shop sells plants fertilizers and other garden products

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