Exercise 24-7 (Algo) Departmental contribution to overhead LO P3 Below are departmental Income statements for a...
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Exercise 24-7 (Algo) Departmental contribution to overhead LO P3 Below are departmental Income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating its Electric Guitar department because it shows a loss. Departmental Income Statements For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Advertising Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Electric Acoustic $ 102,200 45,075 $ 84,300 57,125 10,070 20,100 46,750 37,550 4,995 4,270 8,590 17,900 1,940 1,788) 7,095 5,970 3,005 2,590 47,205 41,100 Income (loss) $ 9,920 $ (3,550) 1. Prepare a departmental contribution to overhead report. 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 Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead For Year Ended December 31 Gross profit Direct expenses Total direct expenses Departmental contribution to overhead Acoustic Electric Combined Required Required 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? < Required 1 Required 2 Exercise 24-7 (Algo) Departmental contribution to overhead LO P3 Below are departmental Income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating its Electric Guitar department because it shows a loss. Departmental Income Statements For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Advertising Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Electric Acoustic $ 102,200 45,075 $ 84,300 57,125 10,070 20,100 46,750 37,550 4,995 4,270 8,590 17,900 1,940 1,788) 7,095 5,970 3,005 2,590 47,205 41,100 Income (loss) $ 9,920 $ (3,550) 1. Prepare a departmental contribution to overhead report. 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 Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead For Year Ended December 31 Gross profit Direct expenses Total direct expenses Departmental contribution to overhead Acoustic Electric Combined Required Required 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? < Required 1 Required 2
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