Problem 13-26 Eliminating a segment LO 13.4 Fanning Boot Co sells men's, women's, and children's boots. For each type of boot sold, it operates a separate department that has its own manager. The manager of the men's department has a sales staff of nine employees, the manager of the women's department has six employees, and the manager of the children's department has three employees. All departments are housed in a single store. In recent years, the children's department has operated at a net loss and is expected to continue to do so. Last year's income statements follow 300 Cost of goods sold Gros margin Department manager's salary Sales comissions Hent on store lease Store utilitien Net Income (los) 15 Men's Department $ 650,000 (268,000) 382,000 (57,000) (111,200) 126,000) 9.000) 5 178,000 Women's Department $ 470.000 (178,400) 291,600 (46.000) (80,600) (26.000) 9.000) $ 130,000 Children's Department $180,000 (99,375) 80,625 (26,000) (30,400) (26,000) $10,775) Required a. Calculate the contribution margin. Determine whether to eliminate the children's department. b-1. Calculate the net income for the company as a whole with the children's department b-2. Confirm the conclusion you reached in Requirement aby preparing income statements for the company as a whole with and without the children's department c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $37.000. Would this information affect the decision that you made in Requirement a? a. Calculate the contribution margin. Determine whether to eliminate the children's department b-1. Calculate the net income for the company as a whole with the children's department. b-2. Confirm the conclusion you reached in Requirement a by preparing income statements for the company as a whole with and without the children's department. c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $37,000. Would this information affect the decision that you made in Requirement a? :02:43 Complete this question by entering your answers in the tabs below. Required A Required 31 Required B2 Required Calculate the contribution margin. Determine whether to eliminate the children's department. (Negative amounts should be indicated by a minus sign.) Contribution to profit loss) Should the children's department be eliminated? Recured A Required 31 > Required a. Calculate the contribution margin. Determine whether to eliminate the children's department. b-1. Calculate the net income for the company as a whole with the children's department. b-2. Confirm the conclusion you reached in Requirement aby preparing income statements for the company as a whole with and without the children's department. c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $37,000. Would this information affect the decision that you made in Requirement a? 03:02:43 ebook Print Complete this question by entering your answers in the tabs below. References Required A Required B: Required B2 Required Calculate the net income for the company as a whole with the children's department Not income (oss) ( Required A Required 2 > without the children's department. c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $37.000. Would this information affect the decision that you made in Requirement a? Complete this question by entering your answers in the tabs below. 3030237 Required A Required 11 Required B2 Required eBook Confirm the conclusion you reached in Requirement aby preparing income statements for the company as a whole with and without the children's department. References Men's Department Women's Department Company Total Sales Cost of goods sold Gross margin Department manager's salary Sales commissions Ronton store lease Stories Net income loss)