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(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

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(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) Required information [The following information applies to the questions displayed below.] Suresh Co. expects its five departments to yield the following income for next year. Dept. M $ 66,000 Dept. N $ 38,000 Dept. o $59,000 Dept. P $45,000 Dept. T $ 31,000 Total $239,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 11,300 53,000 64,300 $ 1,700 38,200 14,400 52,600 $(14,600) 23,300 4,500 27,800 $31,200 15,500 31,200 46,700 $(1,700) 40,500 11,900 52,400 $(21,400) 128,800 115,000 243,800 $ (4,800) 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. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. o Dept. P Dept. T Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)

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