Suresh Co. expects its five departments to yield the following income for next year.

Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios: Management

(1) Does not eliminate any department,
(2) Eliminates departments with expected net losses, and
(3) Eliminates departments with sales dollars that are less than avoidable expenses. Explain your answers to parts 2 and3.

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Dept. M $31,500 Dept. N Dept. o $17,500 $28,000 Dept. P $21,00014,000 Dept. T Sales Expenses Avoidable Unavoidable Total expenses 4,900 25,900 30,800 $ 700 18,200 6,300 24,500 11,200 2,100 13,300 (7,000) $14,700 7,000 14,700 21,700 S (700) 18,900 4,900 23,800 S (9,800) Net income (loss)