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Perez Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. PEREZ COMPANY Income
Perez Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. PEREZ COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold $ 164,000 B $252,000 Sales commissions (122,000) (20,000) (76,000) $254,000 (85,000) (31,000) (23,000) Contribution margin 22,000 145,000 146,000 General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) (37,000) (37,000) (36,000) (6,000) (16,000) Net income (loss) $ (21,000) $ 92,000 $110,000 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 a schedule of relevant sales and costs for Segment A. Sales Relevant Rev. and Cost items for Segment A Effect on income
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