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 the Year 2018
Segment	A				B				C
Sales	$	171,000			$	248,000			$	248,000
Cost of goods sold		(125,000	)			(75,000	)			(89,000	)
Sales commissions		(21,000	)			(25,000	)			(28,000	)
Contribution margin		25,000				148,000				131,000
General fixed operating expenses (allocation of presidents salary)		(41,000	)			(36,000	)			(30,000	)
Advertising expense (specific to individual divisions)		(3,000	)			(13,000	)			0
Net income	$	(19,000	)		$	99,000			$	101,000

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.

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 the Year 2018 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 A B $ 171,000 $248,000 (125,000) (75,000) (21,000) (25,000) 25,000 148,000 (41,000) (36,000) (3,000) |(13,000) $ (19,000) $ 99,000 $ 248,000 (89,000) (28,000) 131,000 (30,000) 0 $101,000 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. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Sales Cost of goods sold Sales commissions Advertising expense Effect on income $ 0 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. FRANKLIN COMPANY Comparative Income Statements for the Year 2018 Keep Seg. A Eliminate Seg. A Decision Sales Cost of goods sold Sales commissions 0 $ 0 Contribution margin General fixed operating expenses Advertising expense Net Income 0 $ 0