Suresh Co. expects its five departments to yield the following income for next year. Dept. M...
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Suresh Co. expects its five departments to yield the following income for next year. Dept. M $79,000 Dept. N $ 41,000 Dept. 0 $72,000 Dept. P $60,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 15,800 43,600 56,600 19,800 72,400 63,400 $ 6,600 $ (22,400) 20,000 5,400 25,400 $46,600 Dept. T $ 40,000 20,000 48,600 46,600 18,200 66,600 66,800 $ (6,600) $(26,800) Total $292,000 $148,000 $146,600 294,600 $ (2,600) 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. Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. T Total (2) Management eliminates departments with sales dollars that are less than avoidable expenses. Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. T Total Suresh Co. expects its five departments to yield the following income for next year. Dept. M $79,000 Dept. N $ 41,000 Dept. 0 $72,000 Dept. P $60,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 15,800 43,600 56,600 19,800 72,400 63,400 $ 6,600 $ (22,400) 20,000 5,400 25,400 $46,600 Dept. T $ 40,000 20,000 48,600 46,600 18,200 66,600 66,800 $ (6,600) $(26,800) Total $292,000 $148,000 $146,600 294,600 $ (2,600) 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. Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. T Total (2) Management eliminates departments with sales dollars that are less than avoidable expenses. Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. T Total
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Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
Posted Date:
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