Answered Essay: Gila Fashion operates three departments: Men's, Women's, and Accessories. Departmental operatin

Gila Fashion operates three departments: Mens, Womens, and Accessories. Departmental operating income data for the third quarter of the current year are as follows: 囲(click the icon to view the data.) Assume that the fixed expenses assigned to each department include only direct fixed costs of the department (rather than unavoidable fixed costs): Salary of the departments manager . Cost of advertising directly related to that department If Gila Fashion discontinues a department, it will not incur these fixed expenses. Under these circumstances, should Gila Fashion discontinue any of the departments? Give your reason, Complete the following analysis to determine the increase or decrease in operating income of droppi ㄨㄧ Data Table Incremental Analysis for Discontinuation Decision Total Contribution margin lost if Accessories is discontinued Less: Fixed cost savings if Accessories is discontinued Operating income Under these circumstances, should Gila Fashion drop any of the departments? Dedsion: Gila Fashion Gila Fashions Product Line Contribution Margin Income Statement For the Year if Accessories is discontinued Product lines Mens Womens Company Total 07,000$ 58,000 49,000 $ 26,000 23,000 S 54,000 $ 31,000 23,000 $ 22,000 98,000 $ 90,000 Sales revenue Less: Variable expenses Contribution margin Less: Fixed expenses Operating income 259,000 179,000 80,000 73,000 7,000 8,000 S Choose from any list or enter any number in the input fields and then continue to the next q 25,000 1,000 $ (17,000) $

Gila Fashion operates three departments: Men’s, Women’s, and Accessories. Departmental operating income data for the third quarter of the current year are as follows: Assume that the fixed expenses assigned to each department include only direct fixed costs of the department (rather than unavoidable fixed costs): Salary of the department’s manager. Cost of advertising directly related to that department If Gila Fashion discontinues a department, it will not incur these fixed expenses. Under these circumstances, should Gila Fashion discontinue any of the departments? Give your reason. Complete the following analysis to determine the increase or decrease in operating income of dropping Contribution margin lost if Accessories is discontinued Less: Fixed cost savings if Accessories is discontinued Operating income if Accessories is discontinued Under these circumstances, should Gila Fashion drop any of the departments? Decision: Gila Fashion Choose from any list or enter any number in the input fields and then continue to the next

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