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Problem: Module 6 Textbook Problem 7 Learning Objective: 6-4 Make appropriate segment elimination decisions Campbell Company operates three segments. Income statements for the segments imply
Problem: Module 6 Textbook Problem 7 Learning Objective: 6-4 Make appropriate segment elimination decisions Campbell Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated CAMPBELL 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 incone (toss) $ 171,000 (128,000) (22,000) 21,000 (40,000) (6,000) $ (25,000) B $244,000 (85,000) (25,000) 134,000 (34,000) (14,000 $ 86,000 $259,000 (94,000) (31,000) 134,000 (27.000) $107.000 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 Sogment A and (2) the elimination of Segment A Complete this question by entering your answers in the tabs below, Required A Required B 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 Elect on income $ 0 Required B b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A 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. CAMPBELL COMPANY Comparative Income Statements for the Year 2 Decision Keep Seg. A Eliminate Seg. A Sales Cost of goods sold Sales commissions Contribution margin $ 0 $ 0 General fixed operating expenses Advertising expense Net Income $ 0 $
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