The shoe department of a company has revenues of $900,000; variable expenses of $720,000; direct fixed costs of $410,000; and allocated, indirect costs of $320,000 in an average year. If the company eliminates this department, what would be the effect on net income? Should we eliminate the department? Explain.

Q2: The shoe department of a company has revenues of $900,000; variable expenses of $270,000; direct fixed costs of $410,000; and allocated, indirect fixed costs of $320,000 in an average year. If the company eliminates this department, what would be the effect on net income? Should we eliminiate the department? Explain