Deela Fashions operates three departments: Mens, Womens, and Accessories. Departmental operating income data for the third quarter

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Deela Fashions operates three departments: Men€™s, Women€™s, and Accessories. Departmental operating income data for the third quarter of 2012 are as follows:

DEELA FASHIONS Income Statement For the quarter ended September 30, 2012 Department Men's Women's Accessories Total 55,0

Assume that the fixed expenses assigned to each department include only direct fixed costs of the department:
— Salary of the department€™s manager
— Cost of advertising directly related to that department
If Deela Fashions drops a department, it will not incur these fixed expenses.
Requirement
1. Under these circumstances, should Deela Fashions drop any of the departments?
Give yourreasoning.

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Related Book For  answer-question

Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

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