Benson Boot Co. sells mens, womens, and childrens boots. For each type of boot sold, it operates a separate department that has its own manager. The manager of the mens department has a sales staff of nine employees, the manager of the womens department has six employees, and the manager of the childrens department has three employees. All departments are housed in a single store. In recent years, the childrens department has operated at a net loss and is expected to continue to do so. Last years income statements follow:

	Mens Department				Womens Department				Childrens Department
Sales	$	630,000			$	450,000			$	170,000
Cost of goods sold		(267,000	)			(177,600	)			(98,375	)
Gross margin		363,000				272,400				71,625
Department managers salary		(55,000	)			(44,000	)			(24,000	)
Sales commissions		(109,200	)			(78,600	)			(29,400	)
Rent on store lease		(24,000	)			(24,000	)			(24,000	)
Store utilities		(7,000	)			(7,000	)			(7,000	)
Net income (loss)	$	167,800			$	118,800			$	(12,775	)

Required (Need an answer where an "X" is)

a. Calculate the contribution margin. Determine whether to eliminate the childrens department.

Contribution to profit (loss)	X
Should the children's department be eliminated?	No

b-1. Calculate the net income for the company as a whole with the children's department.

Net Income (loss): X

b-2. Confirm the conclusion you reached in Requirement a by preparing income statements for the company as a whole with and without the childrens department.

	Mens Department	Womens Department	Company Total
Sales	X	X	0
Cost of goods sold	X	X	0
Gross margin	0	0	0
Department managers salary	X	X	0
Sales commissions	X	X	0
Rent on store lease	X	X	0
Store utilities	$0	$0	$0
Net income (loss)	$0	$0	$0