Vernon Company operates three segments. Income statements for the segments imply that profitability could be improved...

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Vernon 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 Contribution margin General fixed operating expenses (allocation of president's salary) VERNON COMPANY Income Statements for Year 2 A Advertising expense (specific to individual divisions) Net income (loss) 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. Segment A Sales B C $ 165,000 $247,000 $247,000 (125,000) (92,000) (83,000) (20,000) (26,000) 20,000 129,000 (30,000) 134,000 (38,000) Complete this question by entering your answers in the tabs below. Effect on income (42,000) (38,000) (6,000) (13,000) 0 $ (28,000) $ 78,000 $ 96,000 Required Required A B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for < Required A Required B > Required Required 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. VERNON COMPANY Comparative Income Statements for the Year 2 Keep Seg. Eliminate Seg. A A Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income < Required A Required B > Vernon 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 Contribution margin General fixed operating expenses (allocation of president's salary) VERNON COMPANY Income Statements for Year 2 A Advertising expense (specific to individual divisions) Net income (loss) 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. Segment A Sales B C $ 165,000 $247,000 $247,000 (125,000) (92,000) (83,000) (20,000) (26,000) 20,000 129,000 (30,000) 134,000 (38,000) Complete this question by entering your answers in the tabs below. Effect on income (42,000) (38,000) (6,000) (13,000) 0 $ (28,000) $ 78,000 $ 96,000 Required Required A B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for < Required A Required B > Required Required 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. VERNON COMPANY Comparative Income Statements for the Year 2 Keep Seg. Eliminate Seg. A A Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income < Required A Required B >

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A Schedule of Relevant Cost for Product A Particular Sales Cost of Goods Sold Sales Co... View the full answer