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 $ $102,600$ $ $83,700$

Cost of goods sold $43,87547,050$

Gross profit $58,72536,650$

Expenses

Advertising $5,0254,340$

Depreciation$$Equipment $10,1408,540$

Salaries $19,90017,300$

Supplies used $1,9901,720$

Rent $7,0756,040$

Utilities $3,0152,600$

Total expenses $47,14540,540$

Income $($loss$)$ $ $11,580$ $ $(3,890)$

$1.$Prepare a departmental contribution to overhead report.

$2.$Based on contribution to overhead, should the electric guitar department be eliminated?