8 00 Help Solve: Part 2 of 2 Required information [The following information applies to the questions displayed below.] Suresh Company reports the following segment (department) income results for the year. 9.09 points Sales Expenses Skipped Department M $ 79,000 Department N $ 41,000 Department 0 $ 72,000 Department P $ 60,000 Avoidable Unavoidable 15,800 56,600 Total expenses Income (loss) 72,400 43,600 19,800 63,400 20,000 5,400 25,400 20,000 46,600 Department T $ 40,000 48,600 18,200 Total $ 292,000 148,000 146,600 66,600 66,800 294,600 $ 6,600 $ (22,400) $ 46,600 $ (6,600) $ (26,800) $ (2,600) eBook Hint Print References b. Compute the total increase in income if the departments with sales less than avoidable costs, as identified in part a, are eliminated. 8 00 Total increase in income Part 2 of 2 Required information [The following information applies to the questions displayed below.] Suresh Company reports the following segment (department) income results for the year. 9.09 points Sales Expenses Avoidable Unavoidable. Total expenses Income (loss) Department M $ 79,000 Department N $ 41,000 Department 0 $ 72,000 Department P $ 60,000 Department T $ 40,000 Total $ 292,000 15,800 43,600 56,600 19,800 72,400 63,400 20,000 5,400 25,400 20,000 46,600 48,600 18,200 148,000 146,600 66,600 66,800 294,600 $ 6,600 $ (22,400) $ 46,600 $ (6,600) $ (26,800) $ (2,600) b. Compute the total increase in income if the departments with sales less than avoidable costs, as identified part Answer is complete but not entirely correct. are eliminated. Total increase in income $ 0 Example: Suresh Co. reports the following segment (department) income results for the year. Sales Dept. M $50,000 Dept. N Dept. O Dept. P Dept. T $28,000 $60,000 $46,000 $40,000 Avoidable 8,000 30,000 25,000 21,000 46,000 Total $224,000 130,000 Unavoidable 37,000 14,000 10,000 28,000 12,000 101,000 Total expenses 45,000 44,000 35,000 Income (loss) $5,000 ($16,000) $25,000 49,000 58,000 231,000 ($3,000) ($18,000) ($7,000) Decision: Keep Eliminate Keep Keep Eliminate a. If the company plans to eliminate departments that have sales less than avoidable costs, which department(s) would be eliminated? b. Compute the total increase in income if the departments with sales less than avoidable costs, as identified in part a, are eliminated. Sales Dept. M $50,000 Dept. N Dept. O Dept. P Dept. T Total $60,000 $46,000 $156,000 Avoidable 8,000 25,000 21,000 Unavoidable 37,000 14,000 10,000 28,000 12,000 54,000 101,000 Total expenses 45,000 14,000 35,000 49,000 12,000 155,000 Income (loss) $5,000 ($14,000) $25,000 ($3,000) ($12,000) $1,000 Dept. N Dept. T Total Sales $28,000 $40,000 68,000 Avoidable Costs 30,000 46,000 76,000 Impact on Income $(2,000) $(6,000) $(8,000)