Jerry Mounds, controller for Pearl Distributing, has prepared the following financial information for the most recent period showing profitability of its three departments:

	Department A	Department B	Department C
Sales	$52,000	$18,000	$20,000
Variable expenses	36,000	10,000	14,000
Contribution Margin	16,000	8,000	6,000
Fixed expenses:
Factory rent	2,000	1,400	3,200
Depreciation	2,000	600	2,600
Utilities	1,800	1,000	1,200
Total fixed expenses	5,800	3,000	7,000
Operating income	$10,200	$5,000	($1,000)

The factory rent of $3,200 assigned to Department C is avoidable if the department is eliminated. Depreciation will remain unchanged if a department is dropped. Discontinuing Department C will reduce the utilities by $600.

Required. Prepare an analysis showing whether Department C should be eliminated.