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

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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DEELA FASHIONS Income Statement For the quarter ended September 30, 2012 Department Men's Women's Accessories Total 55,000 S 100,000 $ 108,000 $ Sales revenue 263,000 Variable expenses 30,000 92,000 S8,000 180,000 Fixed expenses 26,000 21,000 26,000 73,000 Total expenses 84,000 51,000 118,000 253,000 24,000 $ 4,000 $ (18,000) $ Operating income (loss) 10,000