Question - Liberty Corporation has three departments. Data for the most recent year is presented below:
Dept. C, Dept. A, Dept. T C
Sales $400 $1920 $2240
Variable expenses $3280 $1420 $520
Avoidable Fixed expenses: $555 $265 $360
Operating income (loss) $-315 $55 $920
A) Compute the change in operation, income if liberty company eliminates Dept. C and does not replaces it.
B) Compute the change in operating income if liberty company eliminates Dept. C and doubles the sales in Dept. T without increasing fixed costs.
Short Answer. Write the word or phrase that best completes each statement or answers the question.