The Vice President of a telecommunications company thinks that Department A needs to be eliminated as it is affecting the entire organization. You have been assigned the job of determining if Department A should be eliminated or not and informing the President. The following information has been gathered to assist you in making this decision: Sales Income Statement For the Quarter Ended December 31, 2020 less: Variable Costs Contribution Margin Less fixed expenses: Direct advertising General company advertising* Salaries Rent on building* * Utilities Depreciation of fixtures Insurance on inventory and fixtures General office expenses Service department allocations Total fixed expenses Operating income (loss) Total 887,000 $558,000 88,500 32,000 136,800 78,000 33,000 40,000 3,700 75,000 42,000 529,000 $29,000 $250,000 152,000 98,000 25,000 5,536 37,500 19,500 11,000 10,800 1,200 25,000 14,000 149,536 ($51,536) Department $680,000 425,000 255,000 38,000 15,059 55,300 31,200 12,200 16,300 1,400 25,000 14,000 208,459 $46,541 c $515,000 310,000 205,000 25,500 11,405 44,000 27,300 9,800 12,900 1,100 25,000 14,000 171,005 $33,995 * Allocated based on sales dollars ** Allocated based on space occupied