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Required information Exercise 23-9 Analyzing income effects from eliminating departments LO P4 [The following information applies to the questions displayed below.] Suresh Co. expects its five departments to yield the following income for next year. Dept. $77,000 Dept. N $ 39,800 Dept. 0 $70,000 Dept. P $56,000 Dept. T $ 38,00 Total $ 280,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss 14,880 55,880 70,600 5 6,480 42,489 18,689 61,280 $(22,680) 21,600 5,200 25,800 543,200 19,000 43,200 62,200 $(6,200) 46,800 16, see 63,600 $(25,600) 144,600 139,600 284, 200 $ (4,200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 23-9 Part 1 (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. Dept. P Sales Dept. T Total $ 0 Expenses Avoidable Unavoidable Total expenses Net income (loss) 0 0 5 05 05 05 05 0$ 0 Required information Exercise 23-9 Analyzing income effects from eliminating departments LO P4 [The following information applies to the questions displayed below.) Suresh Co. expects its five departments to yield the following income for next year. Dept. M $77,000 Dept. N $ 39,000 Dept. o $70,000 Dept. P $56,000 Dept. T $ 38,000 Total $280,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 14,800 55,800 70,600 $ 6,400 42,400 18,600 61,000 $(22,000) 21,600 5,200 26,800 $43,200 19,000 43,200 62,200 $(6,200) 46,800 16,800 63,600 $(25,600) 144,600 139, 600 284, 200 $ (4,200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 23-9 Part 2 (2) Management eliminates departments with sales dollars that are less than avoidable expenses. DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. o Dept. P Dept. T Sales Total $ Expenses Avoidable Unavoidable Total expenses Net income (loss) 0 0 1 $ 0 $ 0 $ 0 $ 0 $ 0$ 0