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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. WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic Electric $102,100 $85,000 Sales 44,475 47,650 Cost of goods sold Gross profit 57,625 37,350 Operating expenses Advertising expense 4,985 4,340 Depreciation expense-Equipment 10,110 8,540 Salaries expense 20,000 17,800 Supplies expense 1,990 1,750 Rent expense 7,055 6,030 Utilities expense 2,995 2,640 Total operating expenses 47,135 41,100 Net income (loss) $ 10,490 $ (3,750) 1. Prepare a departmental contribution report that shows each department's contribution to overhead. 2. Based on contribution to overhead, should the electric guitar department be eliminated? Required 1 Required 2 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, 2019 Direct expenses Total direct expenses Departmental contributions to overhead Indirect expenses Total indirect expenses Acoustic Dept. Electric Dept. Combined

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