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Benson Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BENSON COMPANY Income Statements
Benson Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BENSON COMPANY Income Statements for Year 2 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) $ 166,000 (127,000) (15,000) 24,000 (43,000) (5,000) $ (24,000) B $ 251,000 $261,000 (92,000) (87,000) (30,000) (26,000) 129,000 148,000 (35,000) (30,000) (13,000) 0 $ 81,000 $118,000 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. Complete this question by entering your answers in the tabs below. Required A Required 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. BENSON COMPANY Comparative Income Statements for the Year 2 Decision Keep Seg. A Eliminate Seg. A Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income
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