Zena Fashion operates three departments: Men's, Women's, and Accessories. Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) Assume that the fixed expenses assigned to each department include only direct fixed costs of the department (rather than unavoidable fixed costs): Salary of the department's manager Cost of advertising directly related to that department If Zena Fashion discontinues a department, it will not incur these fixed expenses. Under these circumstances, should Zena Fashion discontinue any of the departments? Give your reason. Complete the following analysis to determine the increase or decrease in operating income of dropping the Accessories Department, the only department showing an operating loss this quarter. Incremental Analysis for Discontinuation Decision Contribution margin lost if Accessories is discontinued Less: Fixed cost savings if Accessories is discontinued Operating income if Accessories is discontinued Total Under these circumstances, should Zena Fashion drop any of the departments? Decision: Zena Fashion