Reference no: EM13601355

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?