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    Compute operating income, contribution margin, income of each

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

    a. compute the operating income of the company
    b. compute the contribution margin and operating income of each department
    c. should any department be eliminated, if so which ones and why?

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    Solution Preview

    X Y Z Total

    Sales $400 $200 $80 680
    Variable expenses 128 52 34 214

    Fixed expenses
    Unavoidable 96 52 12 160
    Avoidable 116 104 54 274

    a. Compute the operating income of the company

    680 - 214 - 160 - 274 = ...

    Solution Summary

    This solution is comprised of a detailed explanation to compute the operating income of the company.

    $2.19

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