Chapter 9 question 5Below 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

5 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic Electric Sales $103, 200 $84, 500 3 Cost of goods sold 45, 475 47, 150 points Gross profit 57, 725 37, 350 Operating expenses Advertising expense 5, 045 4, 280 eBook Depreciation expense-Equipment 10, 150 8,580 Salaries expense 19, 600 17,500 Hint Supplies expense 2, 000 1, 780 Rent expense 7, 025 6, 000 Print Utilities expense 3,005 2, 560 Total operating expenses 46, 825 40, 700 Net income (loss) $ 10,900 $ (3, 350) 1. Prepare a departmental contribution report that shows each department's contribution to overhead. 2. Based on contribution to overhead, should the electric guitar department be eliminated? Complete this question by entering your answers in the tabs below