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 $83,500 46,850 36,650 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Sales $101,600 Cost of goods sold 44,175 Gross profit 57,425 Operating expenses Advertising expense 5,055 Depreciation expense-equipment 10, 120 Salaries expense 19,300 Supplies expense 1,960 Rent expense 7,025 Utilities expense 2,975 Total operating expenses 46,435 Net income (loss) $ 10,990 4,340 8,520 17,100 1,760 6,030 2,550 40,300 $(3,650) 1. 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, 2017 Acoustic Electric Dept. Combined Dept. 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? No Yes