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

ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2019 Dept. 100 Dept. 200 Combined Sales $447,000 $287,000 $734,000 Cost of goods sold 261,000 212,000 473,000 Gross profit 186,000 75,000 261,000 Operating expenses Direct expenses Advertising 16,000 12,500 28,500 Store supplies used 5,000 4,600 9,600 DepreciationStore equipment 5,000 3,900 8,900 Total direct expenses 26,000 21,000 47,000 Allocated expenses Sales salaries 65,000 39,000 104,000 Rent expense 9,430 4,710 14,140 Bad debts expense 9,500 7,500 17,000 Office salary 15,600 10,400 26,000 Insurance expense 2,300 1,500 3,800 Miscellaneous office expenses 2,100 1,300 3,400 Total allocated expenses 103,930 64,410 168,340 Total expenses 129,930 85,410 215,340 Net income (loss) $ 56,070 $(10,410) $ 45,660 ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Eliminated Continuing Expenses Expenses Expenses Cost of goods sold $ 473,000 $ 212,000 $ 261,000 Direct expenses Advertising 28,500 12,500 16,000 Store supplies used 9,600 4,600 5,000 Depreciation-Store equipment 8,900 0 8,900 Allocated expenses Sales salaries 104,000 39,000 65,000 Rent expense 14,140 0 14, 140 Bad debts expense 17,000 7,500 9,500 Office salary 26,000 13,000 13,000 Insurance expense 3,800 Miscellaneous office expenses 3,400 Total expenses $ 688,340 $ 288,600 $ 392,540