The financial information for Jamison drug store by business line is as follows:

total drugs cosmetics housewares

sales $250,000 $125,000 $75,000 $50,000

variable expenses $105,000 $50,000 $25,000 $30,000

contribution margin $145,000 $75,000 $50,000 $20,000

fixed expenses salaries $50,000 $29,500 $12,500 $8,000

advertising $15,000 $1,000 $7,500 $6,500

utilities $2,000 $500 $500 $1,000

depreciation $5,000 $1,000 $2,000 $2,000

rent $20,000 $10,000 $6,000 $4,000

insurance $3,000 $2,000 $500 $500

general administrative $30,000 $15,000 $9,000 $6,000

total $125,000 $59,000 $38,000 $28,000

net income/ loss $20,000 $16,000 $12,000 -$8,000

It was determined that the associated salaries, advertising and insurance would all be eliminated if Jamison drops the housewares segment. The utilities, depreciation, rent and general and administrative fees are all allocations. Jamison is currently deciding whether the company would benefit overall if the housewares business line was dropped completely, since it is losing money consistently each month. Using what you know about avoidable and unavoidable costs, advise Jamison as their outside consultant as to which is the better business decision.

The step process is where I'm struggling most.