Solomon Boot Company sells men$$s$,$ women$$s$,$ and children$$s boots. For each type of boot sold, it operates a separate department that has its own manager. The manager of the men$$s department has a sales staff of nine employees, the manager of the women$$s department has six employees, and the manager of the children$$s department has three employees. All departments are housed in a single store. In recent years, the children$$s department has operated at a net loss and is expected to continue to do so$.$ Last year$$s income statements follow.

Men$$s Department Women$$s Department Children$$s Department

Sales $ $700,000$ $ $500,000$ $ $200,000$

Cost of goods sold $(272,500)(182,000)(103,875)$

Gross margin $427,500318,00096,125$

Department manager$$s salary $(66,000)(55,000)(35,000)$

Sales commissions $(120,200)(89,600)(34,900)$

Rent on store lease $(35,000)(35,000)(35,000)$

Store utilities $(18,000)(18,000)(18,000)$

Net income $($loss$)$ $ $188,300$ $ $120,400$ $ $(26,775)$

Required

Calculate the children's department's contribution to profit. Determine whether to eliminate the children$$s department.

Confirm the conclusion you reached in Requirement a by preparing income statements for the company as a whole with and without the children$$s department.

Eliminating the children$$s department would increase space available to display men$$s and women$$s boots. Suppose management estimates that a wider selection of adult boots would increase the store$$s net earnings by $$46,000.$ Would this information affect the decision that you made in Requirement a$?$