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

Essay

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?