Below are departmental income statements for a gultar 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 $84,200 47,350 36,850 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Sales $102,500 Cost of goods sold 45, 175 Gross profit 57,325 Operating expenses Advertising expense 4,995 Depreciation expense-equipment 10,140 Salaries expense 19,500 Supplies expense 2,000 Rent expense 7,085 Utilities expense 2,975 Total operating expenses 46,695 Net Income (loss) $ 10,630 4,300 8,590 18,000 1, 710 6,030 2,550 41,180 $(4,330) 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