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Gibson Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. GIBSON COMPANY Income
Gibson Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. GIBSON COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold Sales commissions Contribution margin A B $ 165,000 $251,000 $251,000 (121,000) (83,000) (85,000) (21,000) (29,000) (29,000) 23,000 139,000 137,000 General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) (42,000) (35,000) (5,000) (18,000) (31,000) 0 Net income (loss) $ (24,000) $ 86,000 $106,000 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. Complete this question by entering your answers in the tabs below. Required A Required B
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