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. Electric $ 84,100 47,550 36,550 WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2017 Acoustic Sales $102,100 Cost of goods sold 44,875 Gross profit 57,225 Operating expenses Advertising expense 4,995 Depreciation expense-equipment 10,080 Salaries expense 19,400 Supplies expense 1,990 Rent expense 7,075 Utilities expense 2,975 Total operating expenses 46,515 Net income (loss) $ 10,710 4,320 8,550 17,500 1,790 5,950 2,570 40,680 $ (4,130) 1. 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, 2017 Acoustic Dept. Electric Dept. Combined Direct expenses 0 Total direct expenses Departmental contributions to overhead Indirect expenses 0 0$ Total indirect expenses 2. Based on contribution to overhead, should the electric guitar department be eliminated? O No Yes