Munoz Company operates three segments. Income statements for the segments imply that profitability could be improved...
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Munoz Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. MUNOZ COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold Sales commissions Contribution margin A B $ 162,000 (126,000) (23,000) $ 249,000 (88,000) C $ 249,000 (78,000) (28,000) General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) 13,000 (44,000) (6,000) 133,000 (39,000) (12,000) (27,000) 144,000 (31,000) 0 $ (37,000) $ 82,000 $ 113,000 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. 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 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 Segment A and (2) the elimination of Segment A. MUNOZ COMPANY Comparative Income Statements for Year 2 Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net income Keep Segment A Eliminate Segment A Munoz Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. MUNOZ COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold Sales commissions Contribution margin A B $ 162,000 (126,000) (23,000) $ 249,000 (88,000) C $ 249,000 (78,000) (28,000) General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) 13,000 (44,000) (6,000) 133,000 (39,000) (12,000) (27,000) 144,000 (31,000) 0 $ (37,000) $ 82,000 $ 113,000 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. 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 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 Segment A and (2) the elimination of Segment A. MUNOZ COMPANY Comparative Income Statements for Year 2 Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net income Keep Segment A Eliminate Segment A
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Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds
Posted Date:
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