Finch Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated.

Required

1. Prepare a schedule of relevant sales and costs for Segment A.

2. 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.

FINCH COMPANY Income Statements for the Year 2018 Seqment Sales Cost of goods sold $163,000 $255,000 $257,000 ales commission:s Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (131,000) (79,000) 80, 000) (24,000) 152,000 (37,000) (34,000(29,000) (22,000) (29,000) 148,000 10,000 (7,000) 17,000) $ (34,000) $101,000 $119,000 Required A Required B Prepare a schedule of relevant sales and costs for SegmentA Relevant Rev. and Cost items for Segment A Effect on income Required ARequired 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. FINCH COMPANY Comparative Income Statements for the Year 2018 Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income Keep Seg. A Eliminate Seg. A