Exercise 22-7 Departmental contribution report LO P3 Below are departmental income statements for a guitar manufacturer. The manufacturer is considering eliminating its electric guitar department since it has a net loss. The company classifies advertising, rent, and utilities expenses as indirect. WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Electric Sales $102,600 44,275 58,325 $84,200 46,950 37,250 Cost of goods sold Gross profit Operating expenses Advertising expense Depreciation expense-equipment Salaries expense Supplies expense Rent expense Utilities expense Total operating expenses 5,055 4,280 10,090 8,520 19,400 1,960 7,005 17,900 1,760 6,010 3,035 46,545 2,580 41,050 $ 11,780 Net income (loss) $ (3,800) 1. Prepare a departmental contribution report that shows each department's contribution to overhead. WHOLESALE GUITARS Income Statement Showing Departmental Contribution to Overhead For Year Ended December 31, 2017 Acoustic Dept. Electric Dept. Combined Direct expenses Total direct expenses Department overhead contributions to Indirect expenses Total indirect expenses