Suresh Co. expects its five departments to yield the following income for next year. Dept. P $56,000 Dept. M Dept. N Total Dept. O $70,000 Dept. T Sales $77,000 $ 39,000 $ 38,000 $ 280,000 Expenses Avoidable Unavoidable Total expenses 19,000 43, 200 62,200 46,800 16,800 14,800 55,800 70,600 $ 6,400 42,400 18,600 61,000 $(22,000) 21,600 5,200 26,800 $43, 200 144,600 139,600 284, 200 $ (4,200) 63,600 $(25,600) Net income (loss) $(6, 200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. (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 Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)

Suresh Co. expects its five departments to yield the following income for next year. Dept. P $56,000 Dept. M Dept. N Total Dept. O $70,000 Dept. T Sales $77,000 $ 39,000 $ 38,000 $ 280,000 Expenses Avoidable Unavoidable Total expenses 19,000 43, 200 62,200 46,800 16,800 14,800 55,800 70,600 $ 6,400 42,400 18,600 61,000 $(22,000) 21,600 5,200 26,800 $43, 200 144,600 139,600 284, 200 $ (4,200) 63,600 $(25,600) Net income (loss) $(6, 200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. (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 Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...

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