Question
Below are departmental Income statements for a gultar manufacturer. The company classifies advertising, rent, and utilities as Indirect expenses. The manufacturer is considering eliminating
Below are departmental Income statements for a gultar manufacturer. The company classifies advertising, rent, and utilities as Indirect expenses. The manufacturer is considering eliminating Its Electric Guitar department because it shows a loss. For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Advertising Departmental Income Statements Acoustic $ 101,900 44,475 Electric $ 83,100 47,750 57,425 35,350 4,985 4,330 10,100 8,510 19,600 17,500 1,980 1,770 7,065 6,000 2,965 2,590 46,695 40,700 Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Income (loss) $ 10,730 $ (5,350) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric gultar department be eliminated? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead For Year Ended December 31 Acoustic Electric Combined Direct expenses Total direct expenses 0 0 Departmental contribution to overhead S 0 Required 2
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