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Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole
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. RUNDLE COMPANY Comparative Income Statements for Year 2 Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net income Keep Segment A Eliminate Segment A 0 $ 0 0 Required A 0 Required B Rundle Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. Segment Sales Cost of goods sold Sales commissions Contribution margin RUNDLE COMPANY Income Statements for Year 2 A $ 165,000 (123,000) B 251,000 C 263,000 (88,000) (84,000) (21,000) (27,000) (22,000) 21,000 (37,000) 136,000 157,000 (42,000) (6,000) (15,000) (41,000) 0 $ (22,000) $ 79,000 $ 116,000 General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) 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.
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