Consider Zena Fashion from S8-5. Assume that the fixed expenses assigned to each department include only direct fixed costs of the department (rather than unavoidable fixed costs as given in S8-5):

€¢ 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.

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Department Men's Women's $54,000 28,000 21,000 Accessories Total Sales revenue Variable expenses. Fixed expenses. Total expenses $100000 $260,000 174,000 72,000 $113,000 $246,000 $(13,000) 14,000 $106,000 58,000 26,000 88,000 25,000 . $ 22,000 $ 5,000