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Devine Fashion in Chicago operates three departments: Men's, Women's, and Accessories. Devine Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each
Devine Fashion in Chicago operates three departments: Men's, Women's, and Accessories. Devine Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) The store will remain in the same building regardless of whether any of the departments are discontinued. Should Devine Fashion discontinue any of the departments? Give your reason. The Men's and Women's Departments While the Accessories Department appears are to be even this department The Accessories Department is has a contributing toward coveringDevine Fashion in Chicago operates three departments: Men's, Women's, and Accessories. Devine Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) The store will remain in the same building regardless of whether any of the departments are discontinued. Should Devine Fashion discontinue any of the departments? Give your reason. The Men's and Women's While the Accessories Department appears Departments are to be even this department ries Department is has a toward covering earning income. losing money.Devine Fashion in Chicago operates three departments: Men's, Women's, and Accessories. Devine Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) The store will remain in the same building regardless of whether any of the departments are discontinued. Should Devine Fashion discontinue any of the departments? Give your reason. The Men's and Women's Departments While the Accessories Department are appears to be even this department The Accessories Department is has a contributing toward covering cost savings. net present value. positive contribution margin.X Data table A B C D E Devine Fashions 2 Product Line Contribution Margin Income Statement For the Year 4 Product lines Men's Women's Accessories Company Total 6 Sales revenue 105,000 $ 52,000 $ 101,000 $ 258,000 7 Less: Variable expenses 58,000 28,000 90,000 176,000 8 Contribution margin 47,000 $ 24,000 $ 11,000 $ 82,000 9 Less: Fixed expenses 25,000 22,000 26,000 73,000 $ 10 Operating income 22,000 $ 2,000 $ (15,000) $ 9,000
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