A guitar manufacturer is considering eliminating its electric guitar division because its $76,000 expenses are higher than its $72,000 sales. The company reports the following expenses for this division Avoidable Unavoidable Expenses Expenses Cost of goods sold $ 56,000 Direct expenses 9,250 $1,250 Indirect expenses 1,600 Service department costs 6,000 1,430 470 Should the division be eliminated? Answer is complete but not entirely correct. Eliminated Kept $ 72,000 Electric Guitar Division is: Sales Expenses Cost of goods sold Direct expenses Indirect expenses Service department costs Total expenses Net Income (loss Revenues from electric guitar 56,000 10,500 2,070 7.430 75.000 $ (4,000) $ (4,000) 1,250 1,500 1.430 4,280 (4.280) Should the division be eliminated? Answer is complete but not entirely correct. Eliminated Kept $ 72,000 56,000 10,500 1,250 O Electric Guitar Division is: Sales Expenses: Cost of goods sold Direct expenses Indirect expenses Service department costs Total expenses Net income (loss) Revenues from electric guitar division Avoidable expenses Revenues are greater than (less than) avoidable expenses by 2,070 7,430 76,000 $ (4,000) 1,600 1,430 4,280 (4,280) $ $ (4,000) (4,280) LA 280 The electric guitar division should be: Kept