Devine Fashion operates three departments: Men's, Women's, and Accessories. Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) Assume that the fixed expenses assigned to each department include only direct fixed costs of the department (rather than unavoidable fixed costs): Salary of the department's manager Cost of advertising directly related to that department If Devine Fashion discontinues a department, it will not incur these fixed expenses. Under these circumstances, should Devine Fashion discontinue any of the departments? Give your reason. Complete the following analysis to determine the increase or decrease in operating income of dropping the Accessories Department, the only department showing an operating loss this quarter. Total Incremental Analysis for Discontinuation Decision Contribution margin lost if Accessories is discontinued Less: Fixed cost savings if Accessories is discontinued Operating income if Accessories is discontinued Choose from any list or enter any number in the input fields and then click Check Answer. 1 part remaining Clear All Check Answer B D E 1 Devine Fashions 2 Product Line Contribution Margin Income Statement 3 For the Year 4 Product lines 5 Men's Women's Accessories Company Total 6 Sales revenue $ 105,000 $ 101,000 $ 52,000 $ 28,000 258,000 176,000 7. Less: Variable expenses 58,000 90,000 8 Contribution margin $ 47,000 $ 24,000 $ 22,000 11,000 $ 26,000 82,000 73,000 9 Less: Fixed expenses 25,000 $ 22,000 $ 2,000 $ (15,000) $ 9,000 10 Operating income 1 part remaining