Problem 22-48 Departmental contribution to income P3D Sadar Company operates a store with two departments: guitar and piano. Information about those departments follows. Guitar Department Piano Department $370,500 $279,500 175,000 Sales Cost of goods sold Direct expenses 320,000 35,000 12,000 5,000 4,200 Salaries Maintenance Utilities Insurance 25,000 10,000 4,500 3,700 The company also incurred the following indirect costs Advertising Salaries $15,000 27,000 Office expenses 3,200 Indirect costs are allocated as follows: advertising on the basis of sales; salaries on the basis of number of employees; and office expenses on the basis of square footage. Additional information about the departments follows. Department Square Footage Guitar Piano Number of Employees 5,000 3,000 2 Required 1. For each department, determine the departmental contribution to overhead and the departmental net income. Check (1) Piano dept. net income, $42,850 2. Should the guitar department be eliminated? Explain