Only part B

Fanning Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. FANNING COMPANY Income Statements for Year 2 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 (loss) $ 166,000 (121,000) (20,000) 25,000 (44,000) (4,000) $ (23,000) B $243,000 (89,000) (25,000) 129,000 (47,000) (12,000) $ 70,000 $258,000 (75,000) (23,000) 160,000 (40,000) 0 $120,000 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 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. FANNING COMPANY Comparative Income Statements for the Year 2 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 Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Sales $ 166,000 Cost of goods sold (121,000) Sales commissions (20,000) Advertising expense (4,000) Effect on income $ 21,000 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 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. FANNING COMPANY Comparative Income Statements for the Year 2 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