College Accounting: P25-9A Durwood Thomas operates the Business Thomas Security

College Accounting

P25-9A Income Statement With Departmental Direct Operating Margin and Total Operating Income. 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 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 clerk's wages expense 30,000 18,000
Truck drivers' wages expense 15,000 15,000
Bad debt expense 3,000 8,000
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 department direct operating margin and total operating income.
2. Calculate department direct operating margin percentages.
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