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Rundle 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 RUNDLE 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) $164,000 (122,000) (17,000) 25,000 (37,000) (4,000) $ (16,000) $ 106,000 $ 252,000 (72,000) (24,000) 156,000 (39,000) (11,000) $ 247,000 (91,000) (32,000) 124,000 (27,000) 0 $ 97,000 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

Rundle 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 RUNDLE 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) $164,000 (122,000) (17,000) 25,000 (37,000) (4,000) $ (16,000) $ 106,000 $ 252,000 (72,000) (24,000) 156,000 (39,000) (11,000) $ 247,000 (91,000) (32,000) 124,000 (27,000) 0 $ 97,000 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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Rundle 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 RUNDLE 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) Complete this question by entering your answers in the tabs below. $164,000 (122,000) (17,000) 25,000 (37,000) (4,000) $ (16,000) Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Revenue and Cost Items for Segment A B $ 252,000 (72,000) (24,000) 156,000 (39,000) (11,000) $ 106,000 $ 247,000 (91,000) (32,000) 124,000 (27,000) 0 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 $ 97,000
Transcribed Image Text:Rundle 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 RUNDLE 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) Complete this question by entering your answers in the tabs below. $164,000 (122,000) (17,000) 25,000 (37,000) (4,000) $ (16,000) Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Revenue and Cost Items for Segment A B $ 252,000 (72,000) (24,000) 156,000 (39,000) (11,000) $ 106,000 $ 247,000 (91,000) (32,000) 124,000 (27,000) 0 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 $ 97,000
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 Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Revenue and Cost Items for Segment A Effect on income 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. Required A Required B <RA Complete this question by entering your answers in the tabs below. 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. RUNDLE COMPANY Comparative Income Statements for Year 2 Keep Segment A Decision Sales Cost of goods sold Sales commissions Required B > Contribution margin General fixed operating expenses Advertising expense Net income Eliminate Segment A 4
Transcribed Image Text: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 Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Revenue and Cost Items for Segment A Effect on income 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. Required A Required B <RA Complete this question by entering your answers in the tabs below. 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. RUNDLE COMPANY Comparative Income Statements for Year 2 Keep Segment A Decision Sales Cost of goods sold Sales commissions Required B > Contribution margin General fixed operating expenses Advertising expense Net income Eliminate Segment A 4
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