Freedom Company has three departments.Data for the most recent year are presented below:
$\begin{array}{llll}&\text { Dept. } X&\text { Dept. } Y&\text { Dept. } Z\
\text { Sales } & \$ 400 & \$ 200 & \$ 80 \
\text { Variable expenses } & 128 & 52 & 34 \
\text { Unavoidable fixed expenses } & 96 & 52 & 12 \
\text { Avoidable fixed expenses } & 116 & 104 & 54
\end{array}$
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?

Question

Freedom Company has three departments.Data for the most recent year are presented below:
 $\begin{array}{llll}&\text { Dept. } X&\text { Dept. } Y&\text { Dept. } Z\
\text { Sales } & \$ 400 & \$ 200 & \$ 80 \
\text { Variable expenses } & 128 & 52 & 34 \
\text { Unavoidable fixed expenses } & 96 & 52 & 12 \
\text { Avoidable fixed expenses } & 116 & 104 & 54
\end{array}$ 
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?

Quizplus · Accepted Answer

The Answer of Freedom Company has three departments.Data for the most recent year are presented below:
 $\begin{array}{llll}&\text { Dept. } X&\text { Dept. } Y&\text { Dept. } Z\
\text { Sales } & \$ 400 & \$ 200 & \$ 80 \
\text { Variable expenses } & 128 & 52 & 34 \
\text { Unavoidable fixed expenses } & 96 & 52 & 12 \
\text { Avoidable fixed expenses } & 116 & 104 & 54
\end{array}$ 
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?

Freedom Company Has Three Departments Required: A) Compute the Operating Income for Freedom Company

Freedom Company Has Three Departments Required:
A) Compute the Operating Income for Freedom Company