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 2017 departmental income statements shows the following. ELEGANT DECOR COMPANY Departmental Income Statement:s For Year Ended December 31, 2017 Dept. 180 Dept. 280 Combined 3282,eee Sales Cost of goods sold Gross profit Operating expenses $439,8ee 3721,eee 17e,eee 68,88e 238,8ee Direct expenses 25,eee 9,5e8 Advertising Store supplies used Depreciation-store equipment Total direct expenses 15, eee 1e,e8e 4,580 4,68e 24,688 17.488 42,96 Allocated expenses Sales salaries Rent expense Bad debts expense office salary Insurance expense Miscellaneous office expenses Total allocated expenses 52,08e 9,478 9,988 18,728 2,580 31,280 4,776 7.888 12,480 83, 280 14, 240 17,788 4, 1ee 155.848 $ (9,258) $ 40,968 Total expenses Net income (loss) 5 50,218 in analyzing whether to eliminate Department 200, management considers the following a. The company has one office worker who earns $600 per week, or $31.200 per year. and four sales clerks who each b. The full salaries of two salesclerks are charged to Department 10O. The full salary of one salesclerk is charged to earn $400 per week, or $20.800 per year for each salesclerk Department 200. The salary of the fourth clerk, who works half-time in both departments, is divided evenly between the two departments. c. 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 worker's salary would be reported as sales salaries and half would be reported as office salary d. 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 e. 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 25% of the miscella neus office expenses presently allocated to it