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Gila Fashion in Pittsburgh operates three departments: Men's, Women's, and Accessories. (Click the icon to view additional information.) Departmental operating income data for the third quarter of the current year are as follows: (Click the icon to view the data.) What should the company do now? First, calculate the relevant operating income from the Shoe Department. Gila Fashion Operating Income-Shoe Department Expected revenues Expected expenses Variable expenses Fixed expenses Enter any number in the edit fields and then continue to the next question o BI i More Info -X Gila Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. If the company discontinues one of the current departments, it plans to replace the discontinued department with a Shoe Department. The company expects the Shoe Department to produce $81.000 in sales and have $44,000 of variable costs. Because the shoe business would be new to Gila Fashion, the company would have to incur an additional $7,200 of fixed costs (advertising, new shoe display racks, and other fixed costs) per quarter related to the department. Print Done nd then continue to the next question. LEVEL Data Table 1 2 Gila Fashions Product Line Contribution Margin Income Statement For the Year 3 4 Product lines 5 6 Sales revenue $ Men's 112,000 $ 56,000 Women's Accessories Company Total 49,000 $ 100,000 $ 261,000 23,000 87,000 166.000 7 Less: Variable expenses 8 Contribution margin $ 56,000 $ 22,000 es 26.000 $ 18,000 13,000 $ 23,000 95,000 63,000 9 Less: Fixed expenses ns $ 34,000 $ 8,000 $ (10,000) $ 32.000 es 10 Operating income Print Done moto mpyar TLUMIT TE

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