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 $103,100 $84,300 Cost of goods sold 44,375 47,350 Gross profit 58, 725 36,950 Operating expenses Advertising expense 5,055 4,280 Depreciation expense- equipment 10,080 8,590 Salaries expense 19,400 17,400 Supplies expense 2,020 1,740 Rent expense 7,055 6,030 Utilities expense 3,035 2,570 Total operating expenses 46,645 40,610 Net income (loss) $ 12,080 $ (3,660) 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 Combined Dept. 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