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Please help Below are departmental income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering
Please help 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 Tor Year Ended December 31 Acoustic Electric Sales $ 101,600 $ 84,300 Coat of goods sold 44.625 47,550 Cross profit 56,925 36,750 Expenses Mdvertising 5,045 4.290 Depreciation-guipment 10,100 0.530 Salari 20,300 17,700 Supplies weed 2,030 1,800 7.103 6,040 Utilities 23,025 2630 Total expenses 47,615 40,990 Income (los) $9,310 5 (4,240) ce 1. Prepare a departmental contribution to overhead report 2. Based on contribution to overhead, should the electric guitar department be eliminated? Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead For Year Ended December 31 Acoustic Electric Combined Direct expenses Total direct expenses Departmental contribution to overhead Required Required 2 > Required 1 Required 2 Based on contribution to overhead, should the electric guitar department be eliminated? ased on contribution to overhead, should the electric guitar department be eliminated?
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