Problem 22-3A (Algo) Departmental income statements LO P3

Garcia Company has two operating departments (Phone and Earbuds) and one service department (Office). Its departmental income statements follow. Indirect expenses and service department expenses consist of rent, utilities, and office department expenses.

GARCIA COMPANY
Departmental Income Statements
For Year Ended December 31
	Phone	Earbuds	Combined
Sales	$ 260,000	$ 95,000	$ 355,000
Cost of goods sold	127,400	58,900	186,300
Gross profit	132,600	36,100	168,700
Expenses
Sales salaries	21,500	8,700	30,200
Supplies used	750	650	1,400
DepreciationEquipment	1,800	700	2,500
Rent	7,040	3,840	10,880
Utilities	3,200	2,300	5,500
Share of office department expenses	11,000	10,500	21,500
Total expenses	45,290	26,690	71,980
Income	$ 87,310	$ 9,410	$ 96,720

Required: Prepare a departmental contribution to overhead report.