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1 nt rences 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 $ 102,400 45,675 56,725 4,975 10,080 19,600 1,930 7,085 2,975 46,645 $ 10,080 Electric $ 84,000 46,850 37,150 4,350 8,600 17,500 1,780 6,050 2,580 40,860 $ (3,710) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? ING 401 492 826

1 nt rences 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 $ 102,400 45,675 56,725 4,975 10,080 19,600 1,930 7,085 2,975 46,645 $ 10,080 Electric $ 84,000 46,850 37,150 4,350 8,600 17,500 1,780 6,050 2,580 40,860 $ (3,710) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? ING 401 492 826

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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nt rences 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 $ 102,400 45,675 56,725 4,975 10,080 19,600 1,930 7,085 2,975 46,645 $ 10,080 Electric $ 84,000 46,850 37,150 4,350 8,600 17,500 1,780 6,050 2,580 40,860 $ (3,710). 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? ING 401 492 826
Transcribed Image Text:nt rences 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 $ 102,400 45,675 56,725 4,975 10,080 19,600 1,930 7,085 2,975 46,645 $ 10,080 Electric $ 84,000 46,850 37,150 4,350 8,600 17,500 1,780 6,050 2,580 40,860 $ (3,710). 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? ING 401 492 826
1.) prepare a departmental contribution to overhead report 2.) based on contribution to overhead, shoulf the electric guitar department be eliminated tes Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a departmental contribution to overhead report. For Year Ended December 31 Direct expenses Departmental Contribution to Overhead Total direct expenses Departmental contribution to overhead Required 1 Required 2 Acoustic Required Electric < Required 1 Combined Required 2 > Based on contribution to overhead, should the electric guitar department be eliminated? Based on contribution to overhead, should the electric guitar department be eliminated? Required 2 >
Transcribed Image Text:1.) prepare a departmental contribution to overhead report 2.) based on contribution to overhead, shoulf the electric guitar department be eliminated tes Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a departmental contribution to overhead report. For Year Ended December 31 Direct expenses Departmental Contribution to Overhead Total direct expenses Departmental contribution to overhead Required 1 Required 2 Acoustic Required Electric < Required 1 Combined Required 2 > Based on contribution to overhead, should the electric guitar department be eliminated? Based on contribution to overhead, should the electric guitar department be eliminated? Required 2 >
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