Exercise 22-7 Departmental contribution report LO P3 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. WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic Electric Sales $102,000 $83,500 Cost of goods sold 44,075 46,950 Gross profit 57,925 36,550 Operating expenses Advertising expense 5,035 4,340 Depreciation expense-Equipment 10,090 8,550 Salaries expense 20,200 17,100 Supplies expense 2,010 1,750 Rent expense 7,105 6,030 Utilities expense 3,025 2,640 Total operating expenses 47,465 40,410 Net income (loss) $ 10,460 $(3,860) 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 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 Total direct expenses Departmental contributions to overhead Indirect expenses Total indirect expenses < Required 1 Required 2 >