A Company Expects Its Three Departments to Yield the Following

question 3

Essay

A company expects its three departments to yield the following income for next year:
$$\begin{array} { l r r r } & \text { Dept. O } & \text { Dept. K } & \text { Dept. W } \\\text { Sales } & \$ 92,000 & \$ 15,000 & \$ 87,000 \\\text { Expenses } & & & \\\text { Avoidable } & 73,000 & 1,000 & 3 6 , 0 0 0 \\\text { Unavoidable } &\underline{ 2,000 }& \underline{ 8 , 0 0 0 } & \underline{3 7 , 0 0 0 } \\\text { Total expenses } & \underline{75,000} & \underline{9,000 }& \underline{73,000} \\\text {Net income (loss)}& \mathbf { \underline{\$ 1 7 , 0 0 0 }} & \mathbf { \underline{\$ 6 , 0 0 0} } & \mathbf { \underline{\$ 1 4 , 0 0 0} }\end{array}$$
Required: Compute the following independent calculations:
a.The effect on total company income if Dept.O is eliminated.
b.The effect on total company income if Dept.K is eliminated.
c.The effect on total company income if Dept.W is eliminated.

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Definitions:

Birth Rate

The number of live births per thousand of population per year.

Population

The total set of individuals or items of interest for statistical, analytical, or research purposes.

Per Annum

An expression meaning "for each year," used to describe rates or amounts calculated on an annual basis.

Rate Of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment’s cost.