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 $83,400 47,950 36,350 WHOLESALE GUTTARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic Sales $103,300 cost of goods sold 44,275 Gross profit 59,025 Operating expenses Advertising expense 5,025 Depreciation expense Equipment 10,130 Salaries expense 19,400 Supplies expense 2,810 Rent expense 7,065 Utilities expense 2,955 Total operating expenses 46,585 Net Income (los) $ 12,440 4,300 8,510 17,700 1.750 6,010 2.550 40,820 5(4,470) 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. 6:44 WHOLESALE GUITARS Income Statement Showing Departmental Contribution to Overhead For Year Ended December 31, 2019 Acoustic Dept. Electric Dept. Combined ok sk Direct expenses Total direct expenses Departmental contributions to overhead Indirect expenses Total indirect expenses H Required 2 > Saved Homework department since it has a net loss. The company classities advertising, rent, and utilities expenses as indirect Electric $83,400 47,050 36,350 WHOLESALE GUITARS Departmental Incone Statements For Year Ended December 31, 2019 Acoustic Sales $103,300 Cost of goods sold 44,275 Gross profit 59,025 Operating expenses Advertising expense 5,025 Depreciation expense-Equipment 10, 130 Salaries expense 19,460 Supplies expense 2,010 Rent expense 7,065 Utilities expense 2,955 Total operating expenses 46,585 Net income (10ss) $ 12,440 4,300 8,510 17,700 1,750 6,010 2,550 40,820 $(4,470) 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