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12 0114:24 Humphrey Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment North were eliminated. The
12 0114:24 Humphrey Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment North were eliminated. The total general company fixed operating expenses will not be affected if Segment North is eliminated. Humphrey COMPANY Income Statements for the Year 202X Segment Sales Cost of goods sold Sales commissions Contribution margin Allocated general company fixed operating expenses Advertising expense (specific to individual divisions) Net income South North $165,000 $240,000 $250,000 (121,000) (92,000) (95,000) (15,000) (22,000) (22,000) 29,000 126,000 133,000 (44,000) (52,000) (44,000) Others (3,000) (10,000) 0 $ (18,000) $ 64,000 $ 89,000 Required Prepare comparative income statements for the company total net income under two alternatives: (1) the retention of Segment North and (2) the elimination of Segment North. Sales Cost of goods sold Humphrey COMPANY Comparative Income Statements for the Year 202X Decision Keep Segment North Eliminate Seg
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