Brickman's Pharmacy Sells a Variety of Products ​
the Fixed Costs Consist of Insurance, Property Taxes, Interest

question 2

Essay

Brickman's Pharmacy sells a variety of products.The business is divided into four segments or departments for reporting purposes.The departments and their operating results are shown below: $\begin{array}{lrrrrr}&\text { Pharmaceuticals}&\text { Cosmetics }&\text { Grocery } &\text { Household }\\\text { Sales Revenue } & \$ 600,000 & \$ 300,000 & \$ 200,000 & \$ 400,000 \\\text { Variable Costs } & 425,000 & 200,000 & 170,000 & 250,000\\\text { Contribution Margin } & \$ 175,000 & \$ 100,000 & \$ 30,000 & \$ 150,000 \\\text { Fixed Costs } & 80,000 & 60,000 & 40,000 & 80,000 \\\text { Net Income (Loss) } & \$ \mathbf{9 5 , 0 0 0} & \mathbf{\$ 4 0 , 0 0 0} & \mathbf{\$ ( 1 0 , 0 0 0 )} & \mathbf{\$} 70,000\end{array}$ ​
The fixed costs consist of insurance, property taxes, interest, and other costs that will not be eliminated if a department is discontinued.
Brickman's management is considering eliminating the grocery department.Assuming sales in the other departments will not be affected by dropping the grocery department, what will be the effect on the company's total operating income?

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Definitions:

Turner Syndrome

An inherited condition in which only one sex chromosome (an X chromosome) is present in cells; karyotype is designated X0; affected individuals are sterile females.

Nondisjunction

Abnormal separation of sister chromatids or of homologous chromosomes caused by their failure to disjoin (move apart) properly during mitosis or meiosis.

Sperm

The male reproductive cell, or gamete, in sexually reproducing organisms, designed to fertilize the female ovum.

Chromosomal Abnormalities

Variations in the number or structure of chromosomes, often leading to genetic disorders or variations.