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) Required 1 Required 2 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? For Year Ended December 31 Direct expenses Acoustic $ 102,200 45,375 56,825 Complete this question by entering your answers in the tabs below. Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead Total direct expenses Departmental contribution to overhead 5,065 10,070 19,700 1,950 7,015 2,965 46,765 $ 10,060 $ (4,370) $ Acoustic Electric $ 83,700 47,250 36,450 4,290 8,500 17,700 1,710 6,010 2,610 40,820 0 0 $ < Required 1 Electric Combined 0 0 $ 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. 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) Required 1 Required 2 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? For Year Ended December 31 Direct expenses Acoustic $ 102,200 45,375 56,825 Complete this question by entering your answers in the tabs below. Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead Total direct expenses Departmental contribution to overhead 5,065 10,070 19,700 1,950 7,015 2,965 46,765 $ 10,060 $ (4,370) $ Acoustic Electric $ 83,700 47,250 36,450 4,290 8,500 17,700 1,710 6,010 2,610 40,820 0 0 $ < Required 1 Electric Combined 0 0 $ 0 0 Required 2 >

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Description: Below are departmental income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirectexpenses. The manufacturer is considering eliminating its Electric Guitar department because it shows a loss.For Y

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 9SPB

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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 ellminsting its Electric Guitar department because it shows a loss. 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) Departmental Income Statements Required 1 Required 2 Acoustic $ 183,300 44,875 58,425 For Year Ended December 31 Direct expenses 4,995 10,000 19,00 1,948 7,895 3,835 46,945 $ 11,488 Total direct expenses Departmental contribution to overhead Electric 1. Prepares 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. Prepare a departmental contribution to overhead report. Departmental Contribution to Overhead Acousto $ 83,400…
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