Question

Mila Fashion in New York operates three departments: Men’s, Women’s, and Accessories. Mila 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:


The store will remain in the same building regardless of whether any of the departments are discontinued. Should Mila Fashion discontinue any of the departments? Give yourreason.


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  • CreatedAugust 27, 2014
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