Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) A $ 165,000 (126,000) (19,000) 20,000 B $238,000 (83,000) (30,000) 125,000 (40,000) (48,000) (4,000) (18,000) $ (24,000) $ 59,000 с $247,000 (93,000) (24,000) 130,000 (26,000) $104,000 equired . Prepare a schedule of relevant sales and costs for Segment A. . 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.
Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) A $ 165,000 (126,000) (19,000) 20,000 B $238,000 (83,000) (30,000) 125,000 (40,000) (48,000) (4,000) (18,000) $ (24,000) $ 59,000 с $247,000 (93,000) (24,000) 130,000 (26,000) $104,000 equired . Prepare a schedule of relevant sales and costs for Segment A. . 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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Transcribed Image Text:Segment
Sales
Cost of goods sold
Sales commissions
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.
Required A Required B
FANNING COMPANY
Comparative Income Statements for the Year 2
Decision
Sales
Cost of goods sold
Sales commissions
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.
Contribution margin
General fixed operating expenses
Advertising expense
Net Income
Keep Seg. A Eliminate Seg. A
$
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.
$
0 $
0 $
< Required A
0
A
$ 165,000
(126,000)
(19,000)
0
B
$238,000
(83,000)
(30,000)
Required B >
20,000
125,000
(40,000) (48,000)
(4,000) (18,000)
$ (24,000) $ 59,000
$247,000
(93,000)
(24,000)
130,000
(26,000)
0
$104,000
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