Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Educational Foundations

Authors: Leslie Kaplan, James D Stice, William Owings

2nd Edition

1285968298, 9781285968292

More Books

Students also viewed these Accounting questions

Question

If the person is a professor, what courses do they teach?

Answered: 1 week ago