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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 4 Utilities Total expenses Income (loss) Acoustic $ 103,400 44,675 58,725 4,995 10,150 Required 1 Required 2 19,700 1,930 7,055 2,995 46,825 $ 11,900 Electric $ 84,400 47,450 36,950 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? 4,260 8,580 17,600 1,780 5,980 2,560 40,760 $ (3,810) Complete this question by entering your answers in the tabs below. vut

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 4 Utilities Total expenses Income (loss) Acoustic $ 103,400 44,675 58,725 4,995 10,150 Required 1 Required 2 19,700 1,930 7,055 2,995 46,825 $ 11,900 Electric $ 84,400 47,450 36,950 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? 4,260 8,580 17,600 1,780 5,980 2,560 40,760 $ (3,810) Complete this question by entering your answers in the tabs below. vut

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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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 $ 103,400 44,675 58,725 For Year Ended December 31 4,995 10,150 19,700 Gross profit Direct expenses 1,930 7,055 2,995 46,825 $ 11,900 Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead Total direct expenses Departmental contribution to overhead 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. Electric $ 84,400 47,450 36,950 Acoustic < Required 1 4,260 8,580 17,600 1,780 5,980 2,560 40,760 $ (3,810) Electric Combined Required 2 >
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 $ 103,400 44,675 58,725 For Year Ended December 31 4,995 10,150 19,700 Gross profit Direct expenses 1,930 7,055 2,995 46,825 $ 11,900 Required 1 Required 2 Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead Total direct expenses Departmental contribution to overhead 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. Electric $ 84,400 47,450 36,950 Acoustic < Required 1 4,260 8,580 17,600 1,780 5,980 2,560 40,760 $ (3,810) Electric Combined Required 2 >
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