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A company collected the data below regarding their two departments Department A and Department B Department A Department B Sales $450,000 $665,000 Direct Expenses 475,000
A company collected the data below regarding their two departments Department A and Department B Department A Department B Sales $450,000 $665,000 Direct Expenses 475,000 575,000 Allocated Expenses 325,000 85,000 Department Income (350,000) 5,000 Based on the data presented, which of the following is an accurate conclusion regarding these two departments Department should be eliminated due to its negative department income Department should be eliminated due to its negative contribution to overhead These departments are both investment centers and therefore cannot be evaluated using anything except RO and residual income Department should not be eliminated due to its positive contribution to overhead None of these we correct
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