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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 $ 102,000 43,675 58,325 5,025 10,130 19,700 Required 1 Required 2 Electric $ 83,200 47,250 35,950 4,270 8,520 17,500 2,010 1,790 7,005 6,020 2,995 2,610 46,865 40,710 $ 11,460 $ (4,760) 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.

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 $ 102,000 43,675 58,325 5,025 10,130 19,700 Required 1 Required 2 Electric $ 83,200 47,250 35,950 4,270 8,520 17,500 2,010 1,790 7,005 6,020 2,995 2,610 46,865 40,710 $ 11,460 $ (4,760) 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.

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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Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead For Year Ended December 31 Gross profit Direct expenses Acoustic Total direct expenses Departmental contribution to overhead $ Required 1 Required 2 0 0 $ < Required 1 Electric Combined < Required 1 0 0 $ Complete this question by entering your answers in the tabs below. 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? 0 0 Required 2 >
Transcribed Image Text:Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead For Year Ended December 31 Gross profit Direct expenses Acoustic Total direct expenses Departmental contribution to overhead $ Required 1 Required 2 0 0 $ < Required 1 Electric Combined < Required 1 0 0 $ Complete this question by entering your answers in the tabs below. 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? 0 0 Required 2 >
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 $ 102,000 43,675 58,325 Required 1 Required 2 5,025 10,130 19,700 2,010 7,005 2,995 46,865 $ 11,460 Electric $ 83,200 47,250 35,950 4,270 8,520 17,500 1,790 6,020 2,610 40,710 $ (4,760) 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.
Transcribed Image Text: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 $ 102,000 43,675 58,325 Required 1 Required 2 5,025 10,130 19,700 2,010 7,005 2,995 46,865 $ 11,460 Electric $ 83,200 47,250 35,950 4,270 8,520 17,500 1,790 6,020 2,610 40,710 $ (4,760) 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.
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