Freedom Company has three departments. Data for the most recent year are presented below:

Dept. X Dept. Y Dept. Z
Sales $400 $200 $80
Variable expenses 128 52 34
Unavoidable fixed expenses 96 52 12
Avoidable fixed expenses 116 104 54

Required:
A) Compute the operating income for Freedom Company.
B) Compute the contribution margin for each department.
C) Compute the operating income for each department.
D) Which department(s) should be eliminated? Why?

Answer rating: 100% (QA)

A Compute the operating income for Freedom Company 32 B Compute the contribution ... View the full answer