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Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BUCKLEY COMPANY Income Statements
Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BUCKLEY 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) $ 330,000 $ 480,000 (242, eee) (184,000) (30,000) (44,eee) 58,000 252, eee (92,00) (92,00) (6,808) (20,000) $ (40,eee) $ 140,000 $ 500,000 (190,000) (44,00) 266,000 (92,800 $ 174,000 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 Rev. and Cost items for Segment A Encome 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) $ 330, eee $ 480,000 (242,000) (184,00) (30,eee) (44.eee) 58, eee 252, eee (92,000) (92, eee) (6, 000) (20,000) $ (40, eee) $ 140, eee $ 5ee, eee (190,000) (44, eee) 266,00 (92,000) B $ 174,000 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 BUCKLEY 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 faxed operating expenses Advertising expense 0 Net
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