Question

Check my Required information Exercise 23-9 Analyzing income effects from eliminating departments LO P4 [The following information applies to the questions displayed below.] Part 2 of 2 Suresh Co. expects its five departments to yield the following income for next year. 10 points Dept. M $65,000 Dept. N $ 37,000 Dept. o $58,000 Dept. P $44,000 Dept. T $ 30,000 Total $234,000 eBook Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) Hint 10,800 52,600 63,400 $ 1,600 37,600 13,800 51,400 $(14,400) 23,000 4,400 27,400 $30,600 15,000 30, 600 45,600 $(1,600) 39,600 11,200 50,800 $ (20,800) 126,000 112,600 238,600 $ (4,600) Print References Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 23-9 Part 2

Answer 1

Sales Total 167,000 DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES EMLIMINATED Dept. M Dept. N Dept. o Dept. P Dept. T $ 65,000 $ 58,000 $ 44,000 $ Expenses: Avoidable $ 10,800 $ 23,000 $ 15,000 $ Unavoidable $ 52,600 $ 13,800 $ 4,400 $ 30,600 $ 11,200 $ Total expenses $ 63,400 $ 13,800 $ 27,400 $ 45,600 $ 11,200 $ Net income (loss) $ 1,600 $ (13,800) $ 30,600 $ (1,600) $ (11,200) $ 48,800 112,600 161,400 5,600 Department N and T have less sales than avoidable expenses. Hence, eliminated. Unavoidable expenses will be incurred even if the department is eliminated. Hence, it is considered.