Exercise 24-7 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. Electric $84,400 47,350 37,050 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Sales $103,500 Cost of goods sold 44,775 Gross profit 58,725 Operating expenses Advertising expense 5,025 Depreciation expense-equipment 10,140 Salaries expense 19,900 Supplies expense 1,930 Rent expense 7,025 Utilities expense 2,955 Total operating expenses 46,975 Net income (loss) $ 11,750 4,340 8,510 17,400 1,700 5,960 2,590 40,500 $ (3,450) 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 Electric Dept. Combined Dept. Direct expenses Total direct expenses Departmental contributions to overhead Indirect expenses Total indirect expenses