12-2A - Drop or Retain a Segment All-Mart is a department store with three major departments: Housewares, Hardware, and Electronics. Company management is very concerned about the performance of the electronics department, noting that it seems to be a drag on the company based on its most recent fiscal quarter. A company-wide segmented income statement follows: Sales Variable expenses Contribution margin Fixed expenses Operating income (loss) Housewares $150,000 60.000 90.000 50.000 $40.000 Hardware $220,000 100.000 120,000 100.000 $20,000 Electronics Total $200,000 $570,000 140.000 300,000 60,000 270,000 90.000 240.000 S(30.000) $30.000 The company notes that if the electronics department were dropped the other departments could expect a 10% decrease in foot traffic and sales. Also, S20,000 of the electronics department's fixed costs are allocated and would continue even if the department was dropped. The company has no planned use for the space currently used by the electronics department. Required Compute the net dollar advantage or disadvantage of dropping the electronics department