Mia Fashion operates three departments: Men's, Women's and Accessories Departmental operating income data for the third quarter of the current year are as follows: m Click the loon to view the duto.) Assume that the fixed expenses assigned to each department include only direct fixed costs of the department (rather than unavoidable fixed costs) Salary of the department's manager Cost of advertising directly related to that department If Mia Fashion discontinues a department, it will not incur these fixed expenses. Under these circumstances should Mia Fashion discontinue any of the departments? Give your reason Complete the following analysis to determine the increase or decrease in operating income of drapping the Accessories Department, the only department showing an operating loes this quarter Incremental Analysis for Discontinuation Decision Total Contribution margin lost it Accessories is discontinued Loss: Fixed cost savings it Accessories is discontinued Operating income t Accessories is discontinued Under these circumstances, should Mia Fashion drop any of the departments? Dection: Min Fashion should drop the Accessories Department should drop the Men's Department should drop the Women's Department should keep as the departments Choose from anyol continue to the next question B D E 1 Mila Fashions 2 Product Line Contribution Margin Income Statement For the Year 3 4 5 Men's Product lines Women's Accessories Company Total 55,000 $ 99,000 $ 262,000 32,000 92,000 183,000 6 Sales revenue 108,000 $ 59,000 7 Less: Variable expenses 8 Contribution margin $ 49,000 $ 24,000 23,000 $ 21,000 7,000 $ 24,000 79,000 69,000 9 Less: Fixed expenses 10 Operating income 25,000 $ 2,000 $ (17,000) $ 10,000