Gila Fashions operates three departments: Men€™s, Women€™s, and Accessories. Departmental operating income data for the third quarter of 2016 are as follows:

Assume that the fixed costs 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 Gila Fashions drops a department, it will not incur these fixed costs. Under these circumstances, should Gila Fashions drop any of the departments? Give your reasoning.

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GILA FASHIONS Income Statement For the Quarter Ended September 30, 2016 Department Women's Men's Accessories Total Sales Revenue Variable Costs Contribution Margin Fixed Costs S 103,000 56,000 32,000 24,000 16,000 Operating Income (Loss)18,000 8,000 63,000 40,000 22,000 97,000 256,000 189,000 67,000 59,000 (18,000) 8,000 94,000 3,000 21,000