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Prepare a departmental contribution report

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Question: Below are departmental income statements for a guitar manufacturer. The manufacturer is considering dropping its electric guitar department since it has a net loss. The company classifies advertising, rent, and utilities expenses as indirect.

(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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Reference no: EM131538768

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