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. WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Electric Sales $103,200 $84,900 Cost of goods sold 45, 275 47,650 Gross profit 57,925 37,250 Operating expenses Advertising expense 4,985 4,340 Depreciation expense- 10, 120 equipment 8,510 Salaries expense 19,700 17,300 Supplies expense 2,010 1,710 Rent expense 7,055 6,000 Utilities expense 3,005 2,650 Total operating expenses 46,875 40,510 Net income (loss) $ 11,050 $(3,260) 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 Combined Dept. Dept. Direct expenses Total direct expenses Departmental contributions to overhead Indirect expenses Total indirect expenses