o U$-$Develop had $3$ departments:

$$ Print Department

$$ Camera Department

$$ Frame Department

o Print Department is currently operating at a loss

Prints Cameras Frames

Sales $$10,000$ $$50,000$ $$20,000$

VC $8,00030,00015,000$

CM $2,00020,0005,000$

Less: FC

Rent $1,0002,0001,000$

Salaries $1,0002,5001,500$

Selling & Admin. $5001,5001,000$

Operating Profit $($Loss$)$ $ $(500)$ $$14,000$ $ $1,500$

o If Print Dept. is eliminated:

$$ No change in rent

$$ All Print Dept. salaries will be eliminate

$$ Half of the allocated Selling & Admin. costs will be eliminated

o Operating profit $($loss$)$ if Print Dept. is eliminated $=$

o Operating profit $($loss$)$ if Print Dept. is kept $=$

o Should the Print Dept. be eliminated?

o Qualitative considerations: