ABC Inc. expects its three departments to yield the following
sales and expense information for next year: Dept. D Dept. E Dept.
F Sales $5,000 $10,000 $4,000 Total Expenses: Avoidable 4,000 4,000
1,000 Unavoidable 3,000 2,000 5,000 If Dept. F is eliminated,
overall profit will increase by $1,000. Overall profit will decline
no matter which of these segments is eliminated. If Dept. E is
eliminated, overall profit will decrease by $4,000. If Dept. D is
eliminated, overall profit will increase by $2,000. Eliminating
Dept. F will reduce overall profit more than eliminating Dept. D.