Sadar Company operates a store with two departments: guitar and piano. Information about those depart- Problem 24-4B Departmental cont to income P3 ments follows Guitar Department Piano Department $279,500 175,000 Sales $370,500 320,000 Direct expenses Salaries. 35,000 12,000 5,000 4,200 25,000 10,000 4,500 3,700 Utilities . Insurance The company also incurred the following indirect costs. Advertising $15,000 27.000 3,200 Office expenses. 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 depart- ments follows. Square Footage 5,000 3,000 Number of Employees Department Piano Required 1. For each department, departmenta 2. Should the guitar department be eliminated? Explain. nt, determine the departmental contribution to overhead and the departmental net Check () Pla income, $42,8 income