Hawkeye Golf Is Considering Dropping the Clothing Department Because It

Essay

Hawkeye Golf is considering dropping the clothing department because it is not generating a profit as disclosed by the following data:
$$\begin{array} { l l } \text { Sales } & \$ 1,800 \\\text { Cost of Goods Sold } & \underline { 800 } \\\text { Grom Profit on Sales } &\$ 1,000 \\\text { Direct Expenses } &700 \\\text { Indirect Expenses } & \underline{\$ 500}\\\text { Net Loss } &\underline{ \$ (200)} \\\end{array}$$ Note: None of the indirect expenses can be avoided by dropping the department.
Should Hawkeye drop the department? Show your computations.