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Exercise 24-7 Departmental contribution report LO P3 Below are departmental Income statements for a gultar manufacturer. The manufacturer is considering eliminating Its electric gultar department
Exercise 24-7 Departmental contribution report LO P3 Below are departmental Income statements for a gultar manufacturer. The manufacturer is considering eliminating Its electric gultar department since It has a net loss. The company classifies advertising, rent, and utlitles expenses as lIndirect. HHOLESALE GUITARS Departmental Incone Statenents For Year Ended December 31, 2017 Acoustic Electric Sales $183,300 45,475 $84.600 Cost of goods sold 47,458 Gross profit Operating expenses Advertising expense Depreciation expense-equipment Salaries expense Supplies expense Rent expense Utilities expense Total operating expenses 57,825 37,150 5,ess 10,128 4,288 8,540 19.800 17,400 1,978 7,025 1,718 6,e58 3.e25 2.610 46,995 40,590 Net income (loss) $10,830 $(3,440) . Prepare a departmental contribution report that shows each department's contribution to overhead. 1. Prepare a departmental contributlon report that shows each department's contribution to overhead. WHOLE SALE GUITARS Income Statement Showing Departmental Contri bution to Overhead For Year Ended December 31, 2017 Acoustic Dept. Electric Dept. Combined Direct expenses Total direct expenses Departmental contributions to overhead Indirect expenses Total indirect expenses 2 Based on contributlon to overhead, should the electric quitar department be eliminated
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