A retail store has three operating departments $($Hardware$,$ Clothes, and Home$)$ supported by two service departments $($Advertising and Purchasing$).$ Total Advertising expenses of $\backslash (\backslash$$ $19,000\backslash )$ are allocated to the operating departments based on sales. Total Purchasing expenses of $\backslash (\backslash$$ $21,000\backslash )$ are allocated to the operating departments based on purchase orders.

Enter answers in the tabs below.

Allocate Advertising expenses to the operating departments. A company classifies its rent, advertising, and utilities as indirect expenses. The company is considering eliminating its Guitars department because it shows a loss as follows.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Departmental Income Statements$\}\backslash \backslash$

$\backslash$hline For Year Ended December $31$ & Drums & Guitars $\backslash \backslash$

$\backslash$hline Sales & $\backslash$$ $261,000$ & $\backslash$$ $229,000\backslash \backslash$

$\backslash$hline Cost of goods sold & $129,350$ & $142,500\backslash \backslash$

$\backslash$hline Gross profit & $131,650$ & $86,500\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Expenses$\}\backslash \backslash$

$\backslash$hline Rent & $14,010$ & $13,700\backslash \backslash$

$\backslash$hline Depreciation$-$Machinery & $22,100$ & $19,800\backslash \backslash$

$\backslash$hline Supervisory salaries & $36,400$ & $28,800\backslash \backslash$

$\backslash$hline Advertising & $17,950$ & $14,300\backslash \backslash$

$\backslash$hline Supplies used & $5,860$ & $5,200\backslash \backslash$

$\backslash$hline Utilities & $7,890$ & $6,900\backslash \backslash$

$\backslash$hline Total expenses & $104,210$ & $88,700\backslash \backslash$

$\backslash$hline Income $($loss$)$ & $\backslash$$ $27,440$ & $\backslash$$ $\backslash ((2,200)\backslash )\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Prepare a departmental contribution to overhead report.

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|\}$

$\backslash$hline $\backslash$multicolumn$\{4\}\{|$c$|\}\{$ Departmental Contribution to Overhead $\}\backslash \backslash$

$\backslash$hline For Year Ended December $31$ & Drums & Guitars & Combined $\backslash \backslash$

$\backslash$hline & & & $\backslash \backslash$

$\backslash$hline Gross profit & & & $\backslash \backslash$

$\backslash$hline Direct expenses & & & $\backslash \backslash$

$\backslash$hline & & & $\backslash \backslash$

$\backslash$hline & & & $\backslash \backslash$

$\backslash$hline Total direct expenses & & & $\backslash \backslash$

$\backslash$hline Departmental contribution to overhead & & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$