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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

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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 company classifies advertising, rent, and utilities expenses as indirect Electric $84,500 47,650 37.050 WHOLESALE GUITARS Departmental Income Statements Tor Year Ended December 31, 2017 Acoustic Sales $101,600 Cost of goods sold 45,275 Gross profit 56,325 Operating expenses Advertising expense 5.045 Depreciation expense-equipment 10,120 Salaries expense 19,500 Supplies expense 1,980 Rent expense 7,065 Utilities expense 2,995 Total operating expenses 46,705 Net Income (los) $ 9,620 4,320 8.560 17,800 1,800 6,040 2,550 41,070 $14,020) 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 Direct expenses Proy Sot7 - Next > 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 Direct expenses Total direct expenses Departmental contributions to overhead Indirect expenses Total indirect expenses 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

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