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	$ 102,000	$ 84,800
Cost of goods sold	43,875	47,350
Gross profit	58,125	37,450
Expenses
Advertising	5,065	4,300
DepreciationEquipment	10,130	8,560
Salaries	19,700	17,500
Supplies used	2,010	1,750
Rent	7,085	6,020
Utilities	2,975	2,640
Total expenses	46,965	40,770
Income (loss)	$ 11,160	$ (3,320)

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