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Business, 05.05.2020 06:10 smit715674

Below are departmental income statements for a guitar manufacturer. The manufacturer is considering eliminating its electric guitar department since it has a net loss. The company classifies advertising, rent, and utilities expenses as indirect. WHOLESALE GUITARS Departmental Income Statements For Year Ended December 31, 2019 Acoustic Electric Sales $ 112,500 $ 105,500 Cost of goods sold 55,675 66,750 Gross profit 56,825 38,750 Operating expenses Advertising expense 8,075 6,250 Depreciation expense—Equipment 10,150 9,000 Salaries expense 17,300 13,500 Supplies expense 2,030 1,700 Rent expense 6,105 5,950 Utilities expense 3,045 2,550 Total operating expenses 46,705 38,950 Net income (loss) $ 10,120 $ (200 ) 1. Prepare a departmental contribution report that shows each department’s contribution to overhead. 2. Based on contribution to overhead, should the electric guitar department be eliminated?

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Below are departmental income statements for a guitar manufacturer. The manufacturer is considering...
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