Compute the change in operating income if liberty company, Ask an Expert

Accounting

Liberty corporation has three departments.Data for the most recent year is presented below:

Dept. C, Dept. A, Dept. T C
Sales $400 $1920 $2240
Variable expenses $3280 $1420 $520
Avoidable Fixed expenses: $555 $265 $360
Operating income (loss) $-315 $55 $920

A) Compute the change in operation, income if liberty company eliminates Dept. C and does not replaces it.

B) Compute the change in operating income if liberty company eliminates Dept. C and doubles the sales in Dept. T without increasing fixed costs.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9410473

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