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 $ 103,100 $ 83,900 Cost of goods sold 43,675 47,150 Gross profit 59,425 36,750 Expenses Advertising 5,045 4,310 DepreciationEquipment 10,070 8,570 Salaries 19,900 17,800 Supplies used 2,000 1,760 Rent 7,055 5,990 Utilities 2,985 2,560 Total expenses 47,055 40,990 Income (loss) $ 12,370 $ (4,240) 1 Prepare a departmental contribution to overhead report 2 Based on contribution to overhead, should the electric guitar department be eliminated Required 1 Required 2 Prepare a departmental contribution to overhead report Departmental Contribution to Overhead For Year Ended December 31 Acoustic Electric Combined Direct expenses Total direct expenses Departmental contribution to overhead Required 1 Required 2 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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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

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	$ 103,100	$ 83,900
Cost of goods sold	43,675	47,150
Gross profit	59,425	36,750
Expenses
Advertising	5,045	4,310
DepreciationEquipment	10,070	8,570
Salaries	19,900	17,800
Supplies used	2,000	1,760
Rent	7,055	5,990
Utilities	2,985	2,560
Total expenses	47,055	40,990
Income (loss)	$ 12,370	$ (4,240)

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

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Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead For Year Ended December 31 Acoustic Electric Combined Direct expenses Total direct expenses Departmental contribution to overhead Required 1 Required 2 Based on contribution to overhead, should the electric guitar department be eliminated? Based on contribution to overhead, should the electric guitar department be eliminated?