Zain Company has three departments. Data for the most recent year are presented below:

Dept. X Dept. Y Dept. Z

Sales $400 $200 $80

Variable expenses 128 52 34

Unavoidable fixed expenses 96 52 12

Avoidable fixed expenses 116 104 54

Instructions:

1. Compute the operating income for Zain Company.
2. Compute the contribution margin for each department.
3. Compute the operating income for each department.
4. Which department(s) should be eliminated? Why?