S8-6 (book/static) Question Help Mila 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: E(Click the icon to view the data.) 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 Mila Fashion discontinues a department, it will not incur these fixed expenses. Under these circumstances, should Mila Fashion discontinue any of the departments? Give your reason. Complete the following analysis to determine the increase or decrease in operating income of dropping the Accessories Department, the only department showing an operating loss this quarter Incremental Analysis for Discontinuation Decision Total Contribution margin lost if Accessories is discontinued Less: Fixed cost savings if Accessories is discontinued Operating income if Accessories is discontinued X Data Table Mila Fashion Product Line Contribution Margin Income Statement For the Year Product lines Men's Accessories Company Total Women's $ 109,000 $ 56,000 $ 98,000 $ Sales revenue 263,000 59,000 30,000 90,000 179,000 Less: Variable expenses Contribution margin 50,000 $ 26,000 $ 8,000 $ 84,000 18,000 67,000 24,000 25,000 Less: Fixed expenses $ 8,000 $ (17,000) $ 26,000 $ 17,000 Operating income Print Done