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 $83,500 46,950 36,550 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Sales $103,400 Cost of goods sold 45,275 Gross profit 58,125 Operating expenses Advertising expense 5,005 Depreciation expense-equipment 10,130 Salaries expense 19,700 Supplies expense 1,940 Rent expense 7,015 Utilities expense 2,975 Total operating expenses 46,765 Net income (loss) $ 11,360 4,280 8,530 17,300 1,720 5,960 2,620 40,410 $ (3,860) 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 Departmental contributions to overhead Indirect expenses Total Indirect expenses