Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

the following photos are just to show what dropdown options are available. Its all the same question Devine Fashion in Chicago operates three departments: Men's,

the following photos are just to show what dropdown options are available. Its all the same question

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Devine Fashion in Chicago operates three departments: Men's, Women's, and Accessories. Devine Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. Departmental operating income data for the third quarter of the current year are as follows: Click the icon to view the data.) The store will remain in the same building regardless of whether any of the departments are discontinued. Should Devine Fashion discontinue any of the departments? Give your reason The Men's and Women's Departments are even this department has a While the Accessories Department appears to be The Accessories Department is contributing toward covering Devine Fashion intends to remain in the same building whether or not it drops any of the departments. Consequently, the fixed costs will whether or not Devine Fashion eliminates a department. These fixed costs are therefore in the decision whether to eliminate a department. In sum, Devine Fashion Data Table A B D E 1 Devine Fashions 2 Product Line Contribution Margin Income Statement 3 For the Year 4 Product lines 5 Men's 6 Sales revenue S 105,000 $ 58.000 Women's Accessories Company Total 52,000 $ 101,000 $ 258,000 28,000 90.000 178.000 7 Less: Variable expenses S 82,000 8 Contribution margin 9 Less: Fixed expenses 47.000 $ 25,000 24,000 $ 22,000 11,000 $ 26.000 73,000 S 22.000 $ 2,000 $ (15.000) S 9.000 10 Operating income Print Done The Men's and Women's Departments are earning income. While the Accessories Department appears to be The Accessories Department is contributing losing money, toward even this department has a covering Devine Fas! same building whether or not it drops any of the departments. Consequently, the fixed costs will whether or not Devine Fashion eliminates a department. These fixed costs are therefore in the decision whether to eliminate a department. In sum, Dey fixed costs. sales revenue total expenses The Men's and Women's Departments are losing money earning income. While the Accessories Department appears to be The Accessories Department is contributing even this department has a toward covering Devine Fashion intends to rer drops any of the departments. Consequently, the fixed costs will whether or not Devine Fashion eliminates a department. These fixed costs are therefore in the decision whether to eliminate a department. cost savings. In sum, Devine Fashion net present value. positive contribution margin. The Men's and Women's Departments are losing money earning income While the Accessories Department appears to be The Accessories Department is contributing even this department has a toward covering Devine Fashion intends to remain in the same building whether or not it drops any of the departments. Consequently, the fixed costs will whether or not Devine Fashion eliminates a department. These fixed costs are therefore in the decision whether eliminate a department In sum, Devine Fashion change in the future remain the same The Men's and Women's Departments are losing money earning income. While the Accessories Department appears to be The Accessories Department is contributing even this department has a toward covering Devine Fashion intends to remain in the same building whether or not it drops any of the departments. Consequently, the fixed costs will whether or not Devine Fashion eliminates a department. These fixed costs are therefore in the decision whether to eliminate a department. In sum, Devine Fashion irrelevant relevant losing money The Men's and Women's Departments are even this department has a earning income. While the Accessories Department appears to be The Accessories Department is contributing toward covering Devine Fashion intends to remain in the same building whether or not it drops any of the departments. Consequently, the fixed costs will whether or not Devine Fashion eliminates a department. These fixed costs are therefore in the decision whether to eliminate a department. In sum, Devine Fashion should drop the Accessories Department should drop the Men's Department should drop the Women's Department should keep all the departments

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial and managerial accounting

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

1st edition

111800423X, 9781118233443, 1118016114, 9781118004234, 1118233441, 978-1118016114

More Books

Students also viewed these Accounting questions