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 $83,500 46,950 36,550 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic Sales $103, 100 Cost of goods sold 43,675 Gross profit 59,425 Operating expenses Advertising expense Depreciation expense-Equipment 10,090 Salaries expense 19,400 Supplies expense 2,030 Rent expense 7,085 Utilities expense 3,005 Total operating expenses 46,645 Net income (loss) $ 12,780 5,035 4,300 8,550 17,600 1, 780 6,040 2.600 40,870 $(4,320) 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 0 0 0 Departmental contributions to overhead $ 0 $ 0 $ 0 Indirect expenses Total indirect expenses 0 $ 0 2 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?