Linda Fashion in Dover operates three departments: Men's, Women's, and Accessories. (Click the icon to view additional information.) Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) What should the company do now? First, calculate the relevant operating income from the Shoe Department. More Info Linda Fashion Operating IncomeShoe Department Expected revenues Expected expenses: Variable expenses Linda Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. If the company discontinues one of the current departments, it plans to replace the discontinued department with a Shoe Department. The company expects the Shoe Department to produce $75,000 in sales and have $46,000 of variable costs. Because the shoe business would be new to Linda Fashion, the company would have to incur an additional $7,300 of fixed costs (advertising, new shoe display racks, and other fixed costs) per quarter related to the department. Fixed expenses Total expected expenses Expected relevant operating income Print Done Linda Fashion in Dover operates three departments: Men's, Women's, and Accessories (Click the icon to view additional information.) Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) What should the company do now? i Data Table First, calculate the relevant operating income from the Shoe Department Linda Fashion Operating Income-Shoe Department Expected revenues Expected expenses: Linda Fashions Product Line Contribution Margin Income Statement For the Year Variable expenses Product lines Women's Accessories 58,000 $ 105,000 $ 23,000 91,000 Fixed expenses Men's 108,000 $ 57,000 Sales revenue Company Total 271,000 171,000 Total expected expenses Expected relevant operating income Less: Variable expenses Contribution margin Less: Fixed expenses 51,000 S 21,000 35,000 $ 19,000 16,000 S 14,000 S 27.000 (13,000) S 100,000 67,000 33,000 Operating income 30,000 $ Print Done Linda Fashion in Dover operates three departments: Men's, Women's, and Accessories. (Click the icon to view additional information.) Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) What should the company do now? First, calculate the relevant operating income from the Shoe Department. More Info Linda Fashion Operating IncomeShoe Department Expected revenues Expected expenses: Variable expenses Linda Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. If the company discontinues one of the current departments, it plans to replace the discontinued department with a Shoe Department. The company expects the Shoe Department to produce $75,000 in sales and have $46,000 of variable costs. Because the shoe business would be new to Linda Fashion, the company would have to incur an additional $7,300 of fixed costs (advertising, new shoe display racks, and other fixed costs) per quarter related to the department. Fixed expenses Total expected expenses Expected relevant operating income Print Done Linda Fashion in Dover operates three departments: Men's, Women's, and Accessories (Click the icon to view additional information.) Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) What should the company do now? i Data Table First, calculate the relevant operating income from the Shoe Department Linda Fashion Operating Income-Shoe Department Expected revenues Expected expenses: Linda Fashions Product Line Contribution Margin Income Statement For the Year Variable expenses Product lines Women's Accessories 58,000 $ 105,000 $ 23,000 91,000 Fixed expenses Men's 108,000 $ 57,000 Sales revenue Company Total 271,000 171,000 Total expected expenses Expected relevant operating income Less: Variable expenses Contribution margin Less: Fixed expenses 51,000 S 21,000 35,000 $ 19,000 16,000 S 14,000 S 27.000 (13,000) S 100,000 67,000 33,000 Operating income 30,000 $ Print Done