Flashcards Copied Content Exercise 22-7 Departmental contribution to overhead 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. For Year Ended December 31 Bactri Sales $112,500 $105.500 Cost of goods sold.. 55675 3750 Expenses 1075 6.250 Depreciation-Event 10.150 5.000 17,300 13.500 Sapples d 2,030 1,700 6,106 5950 1045 2560 4705 18950 $10.120 $200 1. Prepare a departmental contribution to overhead report (see Exhibit 22.12). 2. Based on contribution to overhead, should the Electric Guitar department be eliminated?