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Gaston Fashion store operates three departments Men's, Women's, and Accessories Departmental operating income data for the third quarter of the current year are as follows
Gaston Fashion store operates three departments Men's, Women's, and Accessories Departmental operating income data for the third quarter of the current year are as follows (Click the icon to view the data) Assume that the fixed expenses 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 If Gaston Fashion drops a department, it will not incur these foxed expenses Under these circumstances should Gaston Fashion drop any of the departments? Give your reason Complete the following analysis to determine the increase or decrease in operating income of dropping the Women's Department (Use parentheses or a minus sign to enter a decrease in operating Income.) Gaston Fashion Analysis of Dropping the Women's Department Decrease in revenues Operating income data Decrease in expenses Variable expenses Fixed expenses Department Men's Women's Accessories Total 94.000 $ 61,000 S 101,000 $ 256,000 Decrease in total expenses 5 Sales revenue... Variable expenses... Increase (decrease) in operating income 53,000 19,000 72,000 38,000 24,000 Fixed expeoses 81000 28,000 172,000 71.000 243,000 62,000 109,000 Total expenses Operating Income (loss) 22 000 $ (1.000) $ (8,000) $ 13,000
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