Vernon Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) VERNON COMPANY Income Statements for Year 2 Complete this question by entering your answers in the tabs below. Required A Required B Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A A B $ 168,000 $254,000 $261,000 (122,000) (22,000) 24,000 156,000 (42,000) (40,000) (5,000) (16,000) $ (23,000) $100,000 $113,000 (76,000) (22,000) (95,000) (29,000) 137,000 (24,000) 0

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