Linda Fashion operates three departments: Men\'s, Women\'s, and Accessories. Dep

Question

Linda 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 ?(Click the icon me that the fixeData Table Salary of the depa Cost of advertisin If Linda Fashion dis departments? Give y of the Linda Fashions Product Line Contribution Margin Income Statement For the Year rtment showing an Complete the followi operating loss this q Product lines Incremen Contribution margin Less: Fixed cost sa Men's Women's Accessories Company Total 106,000 $ 59,000 47,000 $ 26,000 21,000 $ 101,000 $ 92,000 Sales revenue Less: Variable expenses Contribution margin Less: Fixed expenses Operating income 55,000 $ 30,000 25,000 $ 18,000 262,000 181,000 81,000 68,000 13,000 Operating income 9,000 $ Under these circum 24,000 7,000 $ (15,000) $ Decision: Linda Fas Print Done

Explanation / Answer

Incremental Analysis for Discontinuation Decision Total Contribution margin lost if Accessories is discontinued -9000 Less: Fixed cost savings if Accessories is discontinued 24000 Operating Income WILL INCREASE By   if Accessories is discontinued 15000 Under these circumstances, Linda Fashion SHOULD DISCONTINUE Accessories

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