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Question
A company expects its three departments to yield the following income for next year:
| Dept. O | Dept. K | Dept. W | |
| Sales | $92,000 | $15,000 | $87,000 |
| Expenses | |||
| Avoidable | 73,000 | 1,000 | 36,000 |
| Unavoidable | 2,000 | 8,000 | 37,000 |
| Total expenses | 75,000 | 9,000 | 73,000 |
| Net income (loss) | $17,000 | $6,000 | $14,000 |
Required: Compute the following independent calculations:
a. The effect on total company income if Dept. O is eliminated.
b. The effect on total company income if Dept. K is eliminated.
c. The effect on total company income if Dept. W is eliminated.
Answer
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