How do we calculate department contribution

Question

Accepted Answer

Department contribution is calculated by subtracting the department's total expenses from its total revenue.

Department contribution = Total revenue - Total expenses
Revenue includes sales, fees, and other income generated by the department
Expenses include salaries, rent, utilities, and other costs incurred by the department
Department contribution is a measure of the department's profitability and financial performance

Accepted Answer

Department sale

Store square feet

Accepted Answer

Departmental contribution to overhead is the amount of money a single department has available after its direct expenses are paid to help pay for the overhead of the business. Departmental contribution to overhead is calculated by subtracting direct expenses from the department’s revenues. This calculation assumes that all indirect expenses are considered overhead.

Contribution %: total department sale/total store sale*100

How do we calculate department contribution

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