Answer and Correct question 3 with sales at the top above direct expenses and answer questions 4 and 5.

Elegant Decor Company's management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The company's 2015 departmental income statements shows the following. ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2015 Combined $443,000 $283,000$726,000 480,000 Dept. 100 Dept. 200 266,000 214,000 69,000 Sales Cost of goods sold Gross profit Operating expenses 77000 246,000 Direct expenses Advertising Store supplies used Depreciation-Store equipment 16,500 6,000 4,200 12,500 5,700 2,900 11,700 7100 Total direct expenses 26,700 21,100 47,800 Allocated expenses 46,800 4,750 Sales salaries Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses 78,000 9,500 124,800 14,250 17,000 9,600 18,720 2,100 2,700 7400 1,200 2,000 3,300 4,700 Total allocated expenses 120,620 74,630 195,250 Total expenses 147,320 243,050 Net income (loss) $ 29,680 (26,730) 2,950 In analyzing whether to eliminate Department 200, management considers the following: a. The company has one office worker who earns $600 per week, or $31,200 per year, and four sales clerks who each earn $600 per week, or $31,200 per year for each salesclerk. b. The full salaries of two salesclerks are charged to Department 100. The full salary of one salesclerk is charged to Department 200. The salary of the fourth clerk, who works half-time in both departments, is divided evenly between the two departments c. Eliminating Department 200 would avoid the sales salaries and the office salary currently allocated to it. However, management prefers another plan. Two salesclerks have indicated that they will be quitting