The following is a description relating to housewares:

All employees working at housewares will be terminated if the housewares are closed. There will be no advertising costs on the housewares if the housewares are closed.

Utility expenses are utility costs for the entire company. The amount charged to each section is an allocation based on the space occupied and cannot be avoided if one section is closed.

Depreciation expense represents depreciation on used equipment. Equipment is custom made and will have no resale value if a part is closed

The rental fee represents the rent for all of the company's residential buildings; these are allocated to all parts based on the dollar of sales. The total monthly rental of $ 20,000 is a long-term rental agreement.

Insurance expense for insurance carried out on inventories in individual parts.

General administrative expenses represent general accounting, purchasing, and management expenses, which are allocated to each portion on a sales dollar basis. This fee will not change if the housewares are closed.

Based on the data above, if we close the housewares it will result in the contribution margin on Drugs decreasing by 10% and the contribution margin on cosmetics decreasing by 15%. Under these conditions, should the housewares be closed? Provide calculations and reasons.

Product Line House- Total Drugs Cosmetics wares 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-fixtures 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 fixed expenses. . . . 125,000 59,000 38,000 28,000 Net operating income (loss) . . . $ 20,000 $ 16,000 $12,000 $ (8,000)