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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. WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Electric Sales Cost of goods sold Gross profit Operating expenses $103,100 84,900 43,675 ,0 46,850 38,050 59,425 4,280 8,520 19,600 17,700 1,750 5,005 10,090 Advertising expense Depreciation expense-equipment Salaries expense Supplies expense Rent expense Utilities expense 2,010 7,095 2,945 6, 000 2,560 Total operating expenses Net income (loss) 6,7454060 40,810 12,680 (2,760) 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 Dept. Electric Dept. Combined
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