Benson Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. Segment Sales Cost of goods sold Sales commissions BENSON COMPANY Income Statements for Year 2 Contribution margin. General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) A $ 169,000 (130,000) (21,000) 18,000 (43,000) (5,000) $ (30,000) B $ 238,000 (81,000) (23,000) 134,000 (37,000) (14,000) $ 83,000 $ 247,000 (83,000) (31,000) 133,000 (26,000) 0 $ 107,000 Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A.
Benson Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. Segment Sales Cost of goods sold Sales commissions BENSON COMPANY Income Statements for Year 2 Contribution margin. General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) A $ 169,000 (130,000) (21,000) 18,000 (43,000) (5,000) $ (30,000) B $ 238,000 (81,000) (23,000) 134,000 (37,000) (14,000) $ 83,000 $ 247,000 (83,000) (31,000) 133,000 (26,000) 0 $ 107,000 Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:**Instruction for Educational Website:**
---
**Task Overview:**
Complete the task by entering your answers in the specified tabs below.
**Instructions:**
1. **Tabs to Use:**
- Required A
- Required B
2. **Task Description:**
- Prepare a schedule listing the relevant sales and costs for Segment A.
**Schedule Format:**
| Relevant Revenue and Cost Items for Segment A | |
|------------------------------------------------|----------------------------------------|
| | |
| | |
| | |
| Effect on income | |
**Additional Steps:**
- Click on "Required A" to input initial data.
- Proceed to "Required B" as the next step for further input or calculations.
**Helpful Tips:**
- Review each item to determine its relevance.
- Consider how each entry affects the overall income.
---
**Diagram/Graph Explanation:**
Currently, there are no graphs or diagrams included in this task, only a format table and procedural instructions are provided.

Transcribed Image Text:**Benson Company Income Statements for Year 2**
Benson Company operates three segments. Income statements for the segments indicate that the company’s profitability could potentially improve if Segment A were eliminated.
| Segment | A | B | C |
|---------------------------------|---------|----------|----------|
| **Sales** | $169,000| $238,000 | $247,000 |
| **Cost of goods sold** | (130,000)| (81,000)| (83,000) |
| **Sales commissions** | (21,000)| (23,000)| (31,000) |
| **Contribution margin** | 18,000 | 134,000 | 133,000 |
| **General fixed operating expenses** (allocation of president's salary) | (43,000)| (37,000)| (26,000) |
| **Advertising expense** (specific to individual divisions) | (5,000) | (14,000) | 0 |
| **Net income (loss)** | $(30,000)| $83,000 | $107,000 |
**Required**
a. Prepare a schedule of relevant sales and costs for Segment A.
b. Prepare comparative income statements for the company as a whole under two alternatives: (1) retention of Segment A and (2) elimination of Segment A.
> Complete this question by entering your answers in the tabs below.
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