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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. Sales Electric $84,100 47,650 36,450 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic $103,500 Cost of goods sold 44,875 Gross profit 58,625 Operating expenses Advertising expense 5,015 Depreciation expense-Equipment 10,140 Salaries expense 19,900 Supplies expense 2,000 Rent expense 7,995 Utilities expense 2,985 Total operating expenses 47,135 Net income (loss) $ 11,490 4,320 8,590 17,400 1,760 6,000 2,590 40,660 $(4,210) 1. Prepare a departmental contribution report that shows each department's contribution to overhead. 2. Based on contribution to overhead, should the electric guitar department be eliminated? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a departmental contribution report that shows each department's contribution to overhead. WHOLESALE GUITARS Income Statement Showing Departmental Contribution to Overhead For Year Ended December 31, 2019 Acoustic Dept. Electric Dept. Combined Dired expenses Total direct expenses Departmental contributions to overhead Indirect expenses Total Indirect expenses Required 2 > Pray 18 17 Ninyl ser uedcnRIOR work Saved Help Save C Below are departmental income statements for a guitar manufacturer. The manufacturer is considering eliminating its el department since it has a net loss. The company classifies advertising, rent, and utilities expenses as indirect Electric $84,100 47,650 36,450 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic Sales $103,500 Cost of goods sold 44,875 Gross profit 58,625 Operating expenses Advertising expense 5,015 Depreciation expense--Equipment 10,140 Salaries expense 19,900 Supplies expense 2,000 Rent expense 7,095 Utilities expense 2,985 Total operating expenses 47,135 Net income (loss) $ 11,490 4,320 8,590 17,400 1,760 6,000 2,590 40,660 $(4,210) 1. Prepare a departmental contribution report that shows each department's contribution to overhead 2. Based on contribution to overhead, should the electric guitar department be eliminated? Complete this question by entering your answers in the tabs below. Required 1 Required Based on contribution to overhead, should the electric guitar department be eliminated? Based on contribution to overhead, should the electric guitar department be eliminated?
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