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 classifles advertising, rent, and utilities expenses as indirect. WHOLESALE GUITARS Departmental Income Statemente Tor Year Ended December 31, 2015 Mountie Electrie Salon $103, 100 $84.900 Coat of goods sold 44,625 47.250 Cross profit 58,425 37,650 Operating expenses Advertising expense 4,975 4,260 Depreciation expense-Equipment 10.060 8.580 Salaries expense 19,700 17.100 Bapplies expense 2,020 1,730 Rent expense 7,065 5,990 Utilities expense 3.925 2,500 Total operating expenses 46.845 40.240 Net incon (los) $ 11,580 ${2,590) 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? 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 0 0 0 Departmental contributions to overhead $ 0 $ 0 $ 0 Indirect expenses Total indirect expenses 0 $ 0 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