Star Destroyer Company operates on three different planets in the galaxy. They are receiving reports that operations may need to cease on Alderaan soon. Income statements for these planets imply that profitability could be improved if operations in Alderaan were eliminated. STAR DESTROYER COMPANY Income Statements for Year 2 Segment Sales Alderaan Batuu Tatooine $ 169,000 $239,000 (74,000) (23,000) 142,000 (44,000) (16,000) $ 82,000 $257,000 (81,000) (27,000) Cost of goods sold (122,000) Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual planets) (16,000) 31,000 (37,000) (6,000) $ (12,000) 149,000 (27,000) Net income (loss) $122,000 Required a. Prepare a schedule of relevant sales and costs for operations in Alderaan. b. Prepare comparative income statements for the company as a whole under two plternatives: (1) the retention of operations in Alderaan and (2) the elimination of operations in Alderaan. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Alderaan. Relevant Rev. and Cost items for Alderaan Sales Effect on income

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Chapter1: Financial Statements And Business Decisions
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Star Destroyer Company operates on three different planets in the galaxy. They are receiving reports that operations may need to
cease on Alderaan soon. Income statements for these planets imply that profitability could be improved if operations in Alderaan were
eliminated.
STAR DESTROYER COMPANY
Income Statements for Year 2
Segment
Sales
Alderaan
Batuu
Tatooine
Cost of goods sold
Sales commissions
Contribution margin
General fixed operating expenses (allocation of president 's salary)
Advertising expense (specific to individual planets)
$ 169,000
(122,000)
(16,000)
31,000
(37,000)
(6,000)
$ (12,000)
$239,000
(74,000)
(23,000)
142,000
(44,000)
(16,000)
$ 82,000
$257,000
(81,000)
(27,000)
149,000
(27,000)
Net income (loss)
$122,000
Required
a. Prepare a schedule of relevant sales and costs for operations in Alderaan.
b. Prepare comparative income statements for the company as a whole under two plternatives: (1) the retention of operations
in Alderaan and (2) the elimination of operations in Alderaan.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Prepare a schedule of relevant sales and costs for Alderaan.
Relevant Rev. and Cost items for Alderaan
Sales
Effect on income
2$
Transcribed Image Text:Star Destroyer Company operates on three different planets in the galaxy. They are receiving reports that operations may need to cease on Alderaan soon. Income statements for these planets imply that profitability could be improved if operations in Alderaan were eliminated. STAR DESTROYER COMPANY Income Statements for Year 2 Segment Sales Alderaan Batuu Tatooine Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president 's salary) Advertising expense (specific to individual planets) $ 169,000 (122,000) (16,000) 31,000 (37,000) (6,000) $ (12,000) $239,000 (74,000) (23,000) 142,000 (44,000) (16,000) $ 82,000 $257,000 (81,000) (27,000) 149,000 (27,000) Net income (loss) $122,000 Required a. Prepare a schedule of relevant sales and costs for operations in Alderaan. b. Prepare comparative income statements for the company as a whole under two plternatives: (1) the retention of operations in Alderaan and (2) the elimination of operations in Alderaan. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Alderaan. Relevant Rev. and Cost items for Alderaan Sales Effect on income 2$
Required
a. Prepare a schedule of relevant sales and costs for operations in Alderaan.
b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of operations
in Alderaan and (2) the elimination of operations in Alderaan.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Alderaan and
(2) the elimination of Alderaan.
STAR DESTROYER COMPANY
Comparative Income Statements for the Year 2
Eliminate
Alderaan
Decision
Keep Alderaan
Sales
Cost of goods sold
Sales commissions
Contribution margin
24
0 $
General fixed operating expenses
Advertising expense
Net Income
< Required A
Transcribed Image Text:Required a. Prepare a schedule of relevant sales and costs for operations in Alderaan. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of operations in Alderaan and (2) the elimination of operations in Alderaan. Complete this question by entering your answers in the tabs below. Required A Required B Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Alderaan and (2) the elimination of Alderaan. STAR DESTROYER COMPANY Comparative Income Statements for the Year 2 Eliminate Alderaan Decision Keep Alderaan Sales Cost of goods sold Sales commissions Contribution margin 24 0 $ General fixed operating expenses Advertising expense Net Income < Required A
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