Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Finch Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. FINCHCOMPANYIncomeStatementsfortheYear2018 Segment A B

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

FINCHCOMPANYIncomeStatementsfortheYear2018

Segment A B C

Sales $168,000$247,000$252,000 Cost of goods sold (126,000) (87,000) (94,000) Sales commissions (18,000) (23,000) (28,000) Contribution margin 24,000 137,000 130,000 General fixed operating expenses (allocation of president's salary) (37,000)(33,000)(37,000)

Advertising expense (specific to individual divisions) (4,000) (14,000) 0

Net income$ (17,000) $90,000 $93,000

Required

  1. a schedule of relevant sales and costs for Segment A.
  2. 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Management

Authors: Don R Hansen, Maryanne M Mowen, Dan L Heitger

5th Edition

357141091, 978-0357141090

More Books

Students also viewed these Accounting questions