Exercise 22-7 Departmental contribution report LO P3 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 $84,800 47, 450 37,350 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic Sales $102,700 Cost of goods sold 44,175 Gross profit 58,525 Operating expenses Advertising expense 5,025 Depreciation expense-Equipment 10,080 Salaries expense 19,900 Supplies expense 1,980 Rent expense 7,005 Utilities expense 2,985 Total operating expenses 46,975 Net Income (loss) $ 11,550 4,310 8,540 17,300 1,790 6,030 2,560 40,530 $(3,180) 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. 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, 2019 Acoustic Dept. Electric Dept. Combined Direct expenses 0 0 0 Total direct expenses Departmental contributions to overhead Indirect expenses $ 0 $ 0 $ 0 Total indirect expenses 0 $ Required Required 2 > Utilities expense Total operating expenses Net income (loss) 2,985 46,975 $ 11,550 2,560 40,530 $(3,180) 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. Required 1 Required 2 Based on contribution to overhead, should the electric guitar department be eliminated? Based on contribution to overhead, should the electric guitar department be eliminated? (Required 1