Zachary Boot Co. 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: Children's Department Women's Men' s Department Department $ 490,000 $690,000 $ 230,000 Sales Cost of goods sold Gross margin Department manager's salary Sales commissions Rent on store lease Store utilities (275,000) 415,000 (71,000) (125,200) (40,000) 23,000 155,800 184,000) 306,000 (60,000) (94,600) (40,000) (106,375) 123, 625 (40,000) (37,400) (40,000) 23,000 $ 88,400 (23,000) Net income (loss) (16,775)