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DJH Enterprises has 3 departments. Operating results for 2019 are as follows: Department 1 Department 2 Department 3 Sales $670,000 $322,000 $856,000 Variable costs 445,000
DJH Enterprises has 3 departments. Operating results for 2019 are as follows: Department 1 Department 2 Department 3 Sales $670,000 $322,000 $856,000 Variable costs 445,000 287,000 602,000 Contribution margin $225,000 $35,000 $254,000 Direct fixed expenses $120,000 $27,000 $163,000 Common fixed expenses 75,000 30,000 94,000 Total fixed expenses $195,000 $57,000 $257,000 Operating income (loss) $30,000 ($22,000) ($3,000) DJH is considering eliminating the departments that show losses. Assume that the direct fixed expenses could be avoided if the department is eliminated. What effect would elimination of Department 2 have on DJH's total operating income
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