! 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 $81,000 Dept. N $ 43,000 Dept. o $77.000 Dept. P $62,000 Dept. 7 $ 42,000 Total $305,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (los) 16,800 57,400 74,200 $ 6,800 44,800 21,000 65,800 $(22,800) 20,600 5,600 26,200 $50, 800 21,000 50,800 71,800 $19, 800) 50,400 19.600 20.000 $(28,000) 153,600 154,400 308,000 $ (3,000) 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. o Dept. P Dept. T Total 0 Sales 0 0 Expenses Avoidable Unavoidable Total expenses Net Income (loss) 0 0 $ 0$ 0$ S $ 05 Exercise 23-9 Part 2 (2) Management eliminates departments with sales dollars that are less than avoidable expenses. Total DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept.M Dept. N Dept. o Dept. P Dept. T $ 0 0 0 Sales Expenses: Avoidable Unavoldable Total expenses Not income (loss) 0 05 05 05 OS S 0 $