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, 450 37, ese WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Sales $103,200 Cost of goods sold 45,375 Gross profit 57,825 Operating expenses Advertising expense 5,075 Depreciation expense equipment 10,950 Salaries expense 20,300 Supplies expense 1,940 Rent expense 7,065 Utilities expense 2,995 Total operating expenses 47,425 Net Income (loss) $ 10,400 4,310 8,550 17,700 1,770 100 2,610 40,940 $(3,890) 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 combined Direct expenses 0 0 0 $ Total direct expenses Departmental contributions to overhead Indirect expenses 0 0 $ 0 Total indirect expenses 0 $ 0 2. Based on contribution to overhead, should the electric guitar department be eliminated? NO Yes