Compute the contribution margin for each departmentcompute

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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?

Reference no: EM13601355

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