Enok, a prospective franchise owner, is looking to keep his monthly costs as low as possible. The franchisor he is checking out is advertising that royalty payments of 8% of sales could be as high as $300,000 per month. The franchisor is claiming that a franchisee can expect monthly sales to be as high as

(1) $300,000.

(2) $3,125,000.

(3) $3,750,000.

(4) $3,000,000.

Vortex company operates a retail store with two departments. information about those departments follows. department a department b sales $ 800,000 $ 450,000 cost of goods sold 497,000 291,000 direct expenses salaries 125,000 88,000 insurance 20,000 10,000 utilities 24,000 14,000 depreciation 21,000 12,000 maintenance 7,000 5,000 the company also incurred the following indirect costs. salaries $36,000 insurance 6,000 depreciation 15,000 office expenses 50,000 indirect costs are allocated as follows: salaries on the basis of sales; insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. additional information about the departments follows. department square footage number of employees a 28,000 75 b 12,000 50 required: 1. determine the departmental contribution to overhead and the departmental net income for department a and department b.