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)

Required:
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?