Below are departmental income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating its Electric Guitar department because it shows a loss.

Departmental Income Statements
For Year Ended December 31	Acoustic	Electric
Sales	$ 102,900	$ 83,700
Cost of goods sold	44,475	47,150
Gross profit	58,425	36,550
Expenses
Advertising	5,065	4,340
DepreciationEquipment	10,130	8,520
Salaries	19,600	17,100
Supplies used	2,020	1,760
Rent	7,065	5,960
Utilities	2,955	2,560
Total expenses	46,835	40,240
Income (loss)	$ 11,590	$ (3,690)

1. Prepare a departmental contribution to overhead report.
2. Based on contribution to overhead, should the electric guitar department be eliminated?