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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) A B $ 164,000 $246,000 (130,000) (75,000) (23,000) (23,000) 11,000 148,000 (37,000) (36,000) (5,000) (11,000) $ (31,000) $101,000 $261,000 (94,000) (22,000) 145,000 (29,000) 0 $116,000 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 a schedule of relevant sales and costs for Segment A. Relevant Rey and cost items for Seament A a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company 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 a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Effect on income lecule Orelevall Tepal segrert 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 Keep Seg. A Eliminate Seg. A Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income
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