Exercise 25-25 Analysis of income effects from eliminating departments LO A1

[The following information applies to the questions displayed below.] Suresh Co. expects its five departments to yield the following income for next year.

Exercise 25-25 Part 1

(1) Management eliminates departments with expected net losses.

Required information Exercise 25-25 Analysis of income effects from eliminating departments LO A1 [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 $40,500 Dept. N $16,200 Dept. o $37,500 Dept. P $40,000 D ept. T $14,700 Total $ 148,900 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 4,900 22,000 26,900 $13,600 17,300 6,700 24,000 $(7,800) 11,300 2,400 13,700 $23,800 15,000 29,000 44,000 $(4,000) 19,200 $ 67, 700 4,500 $ 64,600 23,700 132,300 $(9,000) $ 16,600 Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 25-25 Part 1 (1) Management eliminates departments with expected net losses. Exercise 25-25 Part 1 (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. O Dept. P. Dept. I Total Sales Expenses: L Avoidable Unavoidable Total expenses Net income (loss) L L L L