Suresh Company reports the following segment (department) income results for the year. Department M Department N Department 0 $ 47,000 Department P $ 69,000 Department T $ 42,000 Total $ 87,000 $ 83,000 $ 328,000 Sales Expenses Avoidable 18,800 59,000 77,800 $ 9,200 47,200 23,400 70,600 $ (23,600) 18,500 6,000 24,500 $ 58,500 23,000 58,500 81,500 $ (12,500) 54,000 22,400 76,400 $ (34,400) 161,500 169,300 330,800 $ (2,800) Unavoidable Total expenses Income (loss) xercise 23-9 (Algo) Part 1 If the company plans to eliminate departments that have sales less than avoidable costs, which department(s) would be eliminated?

Suresh Company reports the following segment (department) income results for the year. Department M Department N Department 0 $ 47,000 Department P $ 69,000 Department T $ 42,000 Total $ 87,000 $ 83,000 $ 328,000 Sales Expenses Avoidable 18,800 59,000 77,800 $ 9,200 47,200 23,400 70,600 $ (23,600) 18,500 6,000 24,500 $ 58,500 23,000 58,500 81,500 $ (12,500) 54,000 22,400 76,400 $ (34,400) 161,500 169,300 330,800 $ (2,800) Unavoidable Total expenses Income (loss) xercise 23-9 (Algo) Part 1 If the company plans to eliminate departments that have sales less than avoidable costs, which department(s) would be eliminated?

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Description: [The following information applies to the questions displayed below.]Suresh Company reports the following segment (department) income results for the year.Department M$ 87,000Department P$ 69,000Department T$ 42,000TotalDepartment N Department 0$ 47

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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[The following information applies to the questions displayed below.] Suresh Co. expects its five departments to yield the following income for next year. Dept. 0 $70,000 Dept. M Dept. N Dept. P Dept. T Total $77,000 $ 39,000 $56,000 $ 38,000 $ 280,000 Sales Expenses 14,800 55,800 70,600 42,400 18,600 19,000 43, 200 46,800 16,800 Avoidable 21,600 5, 200 26,800 $43, 200 144,600 139,600 Unavoidable Total expenses 61,000 $(22,000) 62,200 63,600 284, 200 Net income (loss) $ 6,400 $(6, 200) $(25,600) $ (4, 200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPEC TED NET LOSSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. T Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)
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