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. For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Advertising Departmental Income Statements Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Income (loss) Acoustic $ 103,100 43,975 59,125 5,025 10,080 19,500 1,980 7,045 3,025 46,655 $ 12,470 Electric $ 85,000 47,650 37,350 4,310 8,570 17,700 1,720 5,980 2,620 40,900 $ (3,550) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? Answer is not complete. 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. For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Advertising Departmental Income Statements Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Income (loss) Acoustic $ 103,100 43,975 59,125 5,025 10,080 19,500 1,980 7,045 3,025 46,655 $ 12,470 Electric $ 85,000 47,650 37,350 4,310 8,570 17,700 1,720 5,980 2,620 40,900 $ (3,550) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? Answer is not complete. Complete this question by entering your answers in the tabs below.

Name: un.3 Complete this question by entering your answers in the tabs below
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Description: un.3 Complete this question by entering your answers in the tabs below.Required 1 Required 2Prepare a departmental contribution to overhead report.Departmental Contribution to OverheadAcousticFor Year Ended December 31Gross profitDirect expensesTotal

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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