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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
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 AcousticElectric Sales Cost of goods sold Gross profit Operating expenses $101,600 $84,300 47,150 37,150 44, 275 57,325 Advertising expense Depreciation expense-equipment Salaries expense Supplies expense Rent expense Utilities expense 4,300 8,580 20,300 17,90 1,780 6,020 2,600 41,180 5,065 10,060 1,970 7,065 3,005 47 ,465 Total operating expenses Net income (loss) $ 9,860 (4,030)
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