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Below are departmental income statements to? a guitar manufacturer. The company classmes advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating
Below are departmental income statements to? a guitar manufacturer. The company classmes 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 Electric $103,300 $83,800 44,875 47,550 58,425 36,250 5,025 4,310 10,060 8,580 20,200 17,100 1,990 1,790 7,105 6,030 2,985 2,560 47,365 40,360 $13,060 $(4,110) Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Income (loss) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? 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 Departmental contribution to overhead $ 05 0 $ 0 CRequired Required 2 >
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