Operating income, contribution margin of each department

X Y Z

Sales $400 $200 $80

Variable expenses 128 52 34

Fixed expenses:

Unavoidable 96 52 12

Avoidable 116 104 54

Required:

a. Compute the operating income of the company.

b. Compute the contribution margin and operating income of each department.

c. Should any department(s) be eliminated? If so, which one(s) and why?

Please find the solutions attached

a. ($400 + $200 + $80) – ($128 + $96 + $116 + $52 + $52 + $104 + $34 + $12 + $54) = $32

b. X: $400 $128 = …

The expert examines operating income and contribution margin for each department.