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. 1 33,000 Total $ 251,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 12,300 53,800 66,100 $ 1,900 39,400 15,600 55,00 $(17,00) 23,900 4,700 28,600 $36.4A 16,500 36,400 52,900 $(5,900) 42,300 13,300 55,600 $(22,600) 134,400 123,800 258, 200 $ (7,200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios (2) Management eliminates departments with sales dollars that are less than avoidable expenses. DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. o Dept.P Dept. T Total Sales Expenses Avoidable Unavoldable Total expenses Net Income (loss) 0 5050S

Answer 1

Departments with less sales than avoidable expenses eliminated

	Dept M	Dept N	Dept O	Dept P	Dept T	Total
Sales	68000		65000	47000		180000
Expenses
Avoidable	12300		23900	16500		52700
Unavoidable	53800	15600	4700	36400	13300	123800
Total expenses	66100	15600	28600	52900	13300	176500
Net income (loss)	1900	-15600	36400	-5900	-13300	3500