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

 

 

 

. 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?

 

 

 

Exercise 24-7 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 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Sales Acoustic Electric $183,300 $84,600 Cost of goods sold 45,475 47,450 Gross profit 57,825 37,150 Operating expenses Advertising expense 5,855 4,280 Depreciation expense-equipment 18,120 8,548 Salaries expense 19,800 17,400 Supplies expense 1,978 1,718 Rent expense Utilities expense 7,025 6,850 3,825 2,610 Total operating expenses 46,995 40,590 Net income (loss) $18,838 $(3,440) Prepare a departmental contribution report that shows each department's contribution to overhead.