Answer the following questions: 1. How is departmental contribution to overhead an effective tool in assessing each department's performance? = 2. See Exhibit 24.12 on page 1050 of your textbook. Calculate the departmental contributions margin to overhead for each department. Departmental contribution margin to overhead = departmental contributions to overhead / Sales For example, for the Hardware Department, the departmental contributions margin to overhead would be: $29,400/$119,500 = 24.6% 3. Which department has the highest departmental contributions margin? What does that tell you about the performance of that department relative to the performance of other departments? Combined $239,000 147.800 91.200 Salaries expense EXHIBIT 24.12 Departmental Contribution to Overhead A-1 HARDWARE Income Statement Showing Departmental Contribution to Overhead For Year Ended December 31, 2017 Hardware Housewares Appliances Department Department Department Sales $119.500 $71.700 $47.800 Cost of goods sold 73.800 43.800 30.200 Gross profit 45.700 27.900 17.600 Direct expenses 15,600 7.000 7.800 Depreciation expense-Equipment 400 100 200 Supplies expense 300 200 100 Total direct expenses 16,300 8.100 Departmental contributions to overhead $ 29,400 $ 20,600 $ 9.500 Indirect expenses Rent expense Utilities expense Advertising expense Insurance expense General office department expense Purchasing department expense Total indirect expenses Operating income 30.400 700 600 31.700 59,500 _7.300 10.800 1.800 1.000 1.900 15.300 9.700 40.500 $ 19,000 Exhibit 24.12 shows a $9.500 positive contribution to overhead for the appliances department. If this department were eliminated, the company would be worse off. Further, the appliance department's manager is better evaluated using this $9,500 than on the department's operating loss of $(500). The company also compares each department's contribution to overhead to budgeted amounts to assess each department is performance