Below are departmental income statements for a guitar manufacturer. The company classifies advertising, rent, and...
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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 For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Advertising Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Income (loss) Acoustic $ 101,500 45,675 55,825 Electric $ 83,900 47,250 36,650 5,065 10,120 20,200 4,310 8,510 17,100 2,000 1,750 7,055 6,020 3,005 2,580 47,445 40,270 $ 8,3807 $ (3,620) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? 
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. 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated
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 For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Advertising Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Income (loss) Acoustic $ 101,500 45,675 55,825 Electric $ 83,900 47,250 36,650 5,065 10,120 20,200 4,310 8,510 17,100 2,000 1,750 7,055 6,020 3,005 2,580 47,445 40,270 $ 8,3807 $ (3,620) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated?
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