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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

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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 company classifies advertising, rent, and utilities expenses as indirect. Electric $84,000 47,250 36,750 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Sales $100,000 Cost of goods sold 45,075 Gross profit 57,925 Operating expenses Advertising expense 5.035 Depreciation expense-equipment 10,130 Salaries expense 20,200 Supplies expense 1,940 Rent expense 7,085 Utilities expense 3,025 Total operating expenses 47,415 Net income (los) 5 10,510 4.300 3.560 17,700 1.790 6,020 2,620 49,990 $(4,240) 1. Prepare a departmental contribution report that shows each department's contribution to overhead. 1. Prepare a departmental contribution report that shows each department's contribution to overhead Help Say 10 WHOLESALE GUITARS Income Statement Showing Departmental Contribution to Overhead For Year Ended December 31, 2017 Acoustic Dept. Electric Dept. Combined 0152.55 Direct expenses Total direct expenses Departmental contributions to overhead Indirect expenses Total Indirect expenses 2. Based on contribution to overhead, should the electric guitar department be eliminated? O No Yes

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