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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 Segment
Perez Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. PEREZ COMPANY Segment Sales Income Statements for Year 2 B Cost of goods sold $ 165,000 (122,000) $238,000 $249,000 (78,000) (92,000) Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) (18,000) (23,000) (25,000) 25,000 137,000 132,000 (38,000) (4,000) (36,000) (30,000) (15,000) $ (17,000) $ 86,000 $102,000 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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