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 $84,400 47,350 37,050 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Sales $102,600 Cost of goods sold 44,675 Gross profit 57,925 Operating expenses Advertising expense 5,005 Depreciation expense-equipment 10,050 Salaries expense 19,400 Supplies expense 1,990 Rent expense 7,065 Utilities expense 2,985 Total operating expenses 46,495 Net income (loss) $ 11,430 4,260 8,550 17,700 1,710 6,040 2,570 40,830 $(3,780) 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 2. Based on contribution to overhead, should the electric guitar department be eliminated? No Yes