Problem 13-26 Eliminating a segment LO 13-4 Jordan 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 f of nine employees, the manager of the women's department own manager. The manager of the men's department has a has six employees, and the manager of the children's department has three employees. All departments are 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 Women' Department s 490,000 1270,000)80,000)(101,3751 310,000 Men's Children " Department 670,000 Departnent Sales Cost of goods sold Gross margin Department manager's salary Sales comnissions Rent on store lease Store utilities Net income (loss) s 190,000 400, 000 (61,000) (115,200) (50,000) (84,600) (30,000) 88,625 (30,000 ( 32,400) 30,000 113.000 (16,775 (30,000) 180,800 132, 400 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 conckusion you reached in Requirement a by preparing income statements for the company 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 $41,000 Would this information affect the decision that you made in Requirement a