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Below are departmental income statements for a guitar manufacturer. The manufacturer is considering dropping its...

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Below are departmental income statements for a guitar manufacturer. The manufacturer is considering dropping its electric guitar department since it has a net loss. The company classifies advertising, rent, and utilities expenses as indirect. BEST GUITAR Departmental Income Statements For Year Ended December 31, 2011 Sales Cost of goods sold AcousticElectric 101,500 $85,000 46,750 45,675 Gross proft 55,82538,250 Advertising expense Depreciation expense-equipment Salaries expense Supplies expense Rent expense Utilities expense 4,250 8,500 20,30017,000 1,700 5,950 2,550 5,075 10,150 2,030 7,105 3,045 Total operating expenses 47,705 39,950 Net profit (loss) 8,120$ (1.700)

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