Joe Brown, President of Brown Limited is reviewing the most recent financial statements of the Toy Division. The Toy division is located in a separate building and has been in operation for 40 years. Based on the results, Brown is considering shutting down the Division. The financial statement is presented below:

Toy Division

Income Statement

Year Ending December 31, 2021

Sales	$1,500,000
Variable expense	740,000
Contribution margin	760,000
Depreciation expense (1)	24,000
Property tax expense (1)	12,000
Administrative expenses (2)	160,000
Salary expense (3)	460,000
Advertising expense (4)	90,000
Overhead expense (5)	50,000
Utilities expense (3)	96,000
Net loss	$(132,000)

1. Relates to building and equipment. If shutdown, the building and equipment would be donated to a local charity.
2. 70% relates to administration at the Toy Division with the 30% remainder being allocated from Head Office.
3. 100% Relates to the Toy Division.
4. 80% is local advertising and the remaining portion is allocated from Head Office.

(5) 50% allocated from Head Office.

Required:

1. Should the Toy Division be shut down?
2. Any Qualitative factors that should be considered?