Question
Fairview Hospitals has three divisions (service lines). They are General Clinics, Specialty Clinics and Pharmacy Services. The sales for each service line were $1,400,000 General
Fairview Hospitals has three divisions (service lines). They are General Clinics, Specialty Clinics and Pharmacy Services. The sales for each service line were $1,400,000 General Data, $600,000 Specialty Clinics, and $420,000 Pharmacy Services while the variable expenses for each service line (division) were $520,000, $360,000 and $280,000 respectively. The related service line (division) discretionary and committed fixed expenses are presented below:
Fixed expense | General Clinics | Specialty Clinics | Pharmacy Services |
Discretionary | $320,000 | $140,000 | $160,000 |
Committed | $190,000 | $280,000 | $130,000 |
Calculate the net income of each division and the business in total
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