Elegant Decor Companys management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The companys departmental income statements show the following.

In analyzing whether to eliminate Department 200, management considers the following:

1. The company has one office worker who earns $700 per week, or $36,400 per year, and four salesclerks who each earns $500 per week, or $26,000 per year for each salesclerk.
2. The full salaries of two salesclerks are charged to Department 100. The full salary of one salesclerk is charged to Department 200. The salary of the fourth clerk, who works half-time in both departments, is divided evenly between the two departments.
3. Eliminating Department 200 would avoid the sales salaries and the office salary currently allocated to it. However, management prefers another plan. Two salesclerks have indicated that they will be quitting soon. Management believes that their work can be done by the other two clerks if the one office worker works in sales half-time. Eliminating Department 200 will allow this shift of duties. If this change is implemented, half the office workers salary would be reported as sales salaries and half would be reported as office salary.
4. The store building is rented under a long-term lease that cannot be changed. Therefore, Department 100 will use the space and equipment currently used by Department 200.
5. Closing Department 200 will eliminate its expenses for advertising, bad debts, and store supplies; 70% of the insurance expense allocated to it to cover its merchandise inventory; and 19% of the miscellaneous office expenses presently allocated to it.

Dept. 200 $281,000 208,000 73,000 Combined $717,000 473,000 244,000 ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2019 Dept. 100 Sales $ 436,000 Cost of goods sold 265,000 Gross profit 171,000 Operating expenses Direct expenses Advertising 16,500 Store supplies used 6,000 Depreciation-Store equipment 4,400 Total direct expenses 26,900 Allocated expenses Sales salaries 65,000 Rent expense 9,490 Bad debts expense 9,500 office salary 21,840 Insurance expense 1,700 Miscellaneous office expenses 2,300 Total allocated expenses 109,830 Total expenses 136,730 Net income (loss) $ 34,270 12,500 5,600 2,800 20,900 29,000 11,600 7,200 47,800 39,000 4,710 7,500 14,560 900 1,600 68,270 89,170 $(16,170) 104,000 14,200 17,000 36,400 2,600 3,900 178, 100 225,900 $ 18,100 In analyzing whether to eliminate Department 200, management considers the following: Required: 1. Complete the following report showing total expenses, expenses that would be eliminated by closing Department 200 and the expenses that would continue. The statement should reflect the reassignment of the office worker to one-half time as salesclerk. ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Eliminated Continuing Expenses Expenses Expenses Cost of goods sold $ 473,000 Direct expenses Advertising Store supplies used DepreciationStore equipment Allocated expenses Sales salaries Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses Total expenses $ 473,000 $ 0 $ 0