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

FRANKLIN COMPANY
Income Statements for Year 2
Segment	A				B				C
Sales	$	163,000			$	240,000			$	246,000
Cost of goods sold		(121,000	)			(89,000	)			(89,000	)
Sales commissions		(21,000	)			(30,000	)			(31,000	)
Contribution margin		21,000				121,000				126,000
General fixed operating expenses (allocation of presidents salary)		(40,000	)			(52,000	)			(43,000	)
Advertising expense (specific to individual divisions)		(4,000	)			(18,000	)			0
Net income (loss)	$	(23,000	)		$	51,000			$	83,000

Required

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

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

Relevant Rev. and Cost items for Segment A
Effect on income	$0

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.

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.

FRANKLIN COMPANY
Comparative Income Statements for the Year 2
Decision	Keep Seg. A	Eliminate Seg. A
Sales
Cost of goods sold
Sales commissions
Contribution margin	$0	$0
General fixed operating expenses
Advertising expense
Net Income	$0	$0