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Mara Fashions operates three departments: Men's, Women's, and Accessories. Departmental operating income data for the third quarter of 2024 are as follows: (Click the
Mara Fashions operates three departments: Men's, Women's, and Accessories. Departmental operating income data for the third quarter of 2024 are as follows: (Click the icon to view the data.) (Click the icon to view additional information.) If Mara Fashions drops a department, it will not incur these fixed costs Under these circumstances, should Mara Fashions drop any of the departments? Give your reasoning. Begin by completing the following analysis to determine the increase or decrease in operating income from dropping the Accessories Department, the only Department showing an operating loss this quarter. (Enter decreases to profits with a parentheses or minus sign.) Mara Fashions Analysis of Dropping the Accessories Department Expected decrease in revenues Expected decrease in costs Expected decrease in variable costs Expected decrease in fixed costs Expected decrease in total costs in operating income More info Assume that the fixed costs 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 Print Done Data table Mara Fashions Income Statement For the Quarter Ended September 30, 2024 Department Men's Women's Accessories Total Net Sales Revenue 107,000 $ 53,000 $ 100,000 $ 260,000 58,000 25,000 86,000 169,000 Variable Costs Contribution Margin 49,000 28,000 14,000 91,000 29,000 21,000 26,000 76,000 Fixed Costs $ 20,000 $ 7,000 $ (12,000) $ 15,000 Operating Income (Loss) Print Done - X
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