Moon Company is considering eliminating its Drapery Department. Management does not believe the indirect expenses and the level of operations in the other departments will be affected if the Drapery Department closes. Information from Moon€™s income statement for the fiscal year ended December 31, which is considered a typical year, is as follows:

Moon considers $ 19,000 of the operating expenses of the Drapery Department to be direct expenses.

Required
Calculate the departmental margin of the DraperyDepartment.

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Total of All Departments All Other Drapery Department Departments (including Drapery) Sales Cost of Goods Sold Gross Profit Operating Expenses Income (Loss) from Operations $563,000 395,000 $168,000 112,000 (6,00056,000 $75,000 49,000 26,000 32,000 638,000 444,000 194,000 144,000 50,000