Edna Fashions Income Statement For the Quarter Ended September 30, 2018 Department Men's Women's Accessories 101,000 $ 59,000 $ 102,000 $ 65,000 35,000 91,000 Net Sales Revenue Total 262,000 191,000 Variable Costs Contribution Margin Fixed Costs 36,000 27,000 24,000 19,000 11,000 29,000 71,000 75,000 9,000 $ Operating Income (Loss) 5,000 $ (18,000) $ (4,000) Assume that the fixed costs assigned to each department include only direct fixed costs of the department: Salary of the department's manager Cost of advertising directly related to that department Print Done Edna Fashions operates three departments: Men's, Women's, and Accessories. Departmental operating income data for the third quarter of 2018 are as follows: (Click the icon to view the data.) A (Click the icon to view additional information.) If Edna Fashions drops a department, it will not incur these fixed costs. Under these circumstances, should Edna Fashions drop any of the departments? Give your reasoning. Begin by completing the following analysis to determine the increase or decrease in operating income from dropping the Accessories Department, the only Department showing an operating loss this quarter. (Enter decreases to profits with a parentheses or minus sign.) Edna Fashions Analysis of Dropping the Accessories Department Expected decrease in revenues Expected decrease in costs: Expected decrease in variable costs $ 91,000 29,000 Expected decrease in fixed costs Expected decrease in total costs in operating income