Question

Required information The following information applies to the questions displayed below) Suresh Co. expects its five departments to yield the following income for next year. Dept. M $68,000 Dept. N $ 38,000 Dept. O $65,000 Dept. P $47,000 Dept. T $ 33,000 Total $ 251,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 23,900 4.760 12.300 53,800 66,100 $ 1.900 39.400 15,600 55.000 $(17.000) 16,500 36,000 52.900 $(5,900) 42,300 13,300 55,600 $(22,600) 134,400 123,800 258,200 $ (2 200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios (1) Management eliminates departments with expected net losses DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. o Dept. P Dept. Total Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 0S 0S 0 5 0

Answer 1

Depratments with expected net losses Eliminated Dept M Dept N Dept 0 Dept P Dept T Total Sales 680000 650000 0 133000 Expenses Avoidable 123000 239000 036200 Unavoidable 53800 15600 4700 34600 13300 122000 Total Expenses 66100 15600 28600 34600 13300 158200 Net income 1900 -15600 36400 -34600 -13300 -25200