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 Acoustic Electric Sales $ 102,500 $ 84,800 Cost of goods sold 44 275 47.150 Gross profit 57,725 37,650 Expenses Advertising 5,055 4,310 Depreciation Equipment 10,060 8,540 Salaries 19,700 17,100 Supplies used 1,950 1,740 Rent 7,065 5,990 Utilities 2,965 2,570 Total expenses 46,795 40 250 Income (loss) $ 20,930 5 (2,600) 1. Prepare a departmental contribution to overhead report 2 Based on contribution to overhead, should the electric guitar department be eliminated? Complete this question by entering your answers in the tabs below. Required 1 Required 2
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