3. Following table shows sales and cost information for the preceding month for the Discount Drug Company and its three major product lines drugs, cosmetics, and housewares. Among the fixed expenses, Utilities, Depreciation, Rent, and General Administrative expenses are overhead costs that are allocated across the segments and would continue even if the company drops a segment. Using cost-benefit analysis, show whether the company should continue or discontinue the Houseware segment. (10 points)

		Product Line
	Total	Drugs	Cosmetics	Houseware
Sales	$250,000	$125,000	$75,000	$50,000
Variable expenses	$105,000	$50,000	$25,000	$30,000
Contribution margin	$145,000	$75,000	$50,000	$20,000
Fixed expenses:
Salaries	$54,000	$29,500	$12,500	$12,000
Advertising	$16,000	$1,000	$7,500	$7,500
Utilities	$2,000	$500	$500	$1,000
Depreciation	$5,000	$1,000	$2,000	$2,000
Rent	$20,000	$10,000	$6,000	$4,000
Insurance	$3,700	$2,000	$500	$1,200
General Administrative	$30,000	$15,000	$9,000	$6,000
Total fixed expenses	$130,700	$59,000	$38,000	$33,700
Net operating income	$14,300	$16,000	$12,000	($13,700)