Question
Sheria Fashions operates three departments: Meris, Women's, and Accessories Departmental operating income data for the third quarter of 2018 are as follows: Click the icon
Sheria Fashions operates three departments: Meris, Women's, and Accessories Departmental operating income data for the third quarter of 2018 are as follows: Click the icon to view the data) (Click the icon to view additional information) If Sheila Fashions drops a department, it will not incur these fixed costs. Under these cincumstances, should Sheila 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 dec Sheila Fashions Analysis of Dropping the Accessories Department Expected decrease in revenues Expected decrease in costs Expected decrease in variable costs Expected dece in faxed costs Expected decrease in total costs in operating income Under these circumstances, should Sheila Fashions drop any of the departments? Give your reasoning Decision Sheila Fashions because Data Table Sheila Fashions Income Statement For the Quarter Ended September 30, 2018 Department Men's reasonin Women's Accessories Total Net Sales Revenue $ 111,000 $ 58,000 S 96,000 $ 265,000 64.000 26,000 Variable Costs Contribution Margin 92,000 182,000 47,000 32.000 4.000 83.000 25,000 22,000 24,000 Fixed Costs 71,000 $ 22,000 $ 10,000 S (20,000) $ 12,000 Operating Income (Loss) Print Done X i More Info - X - 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
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