Required information Exercise 23-10 Analysis of income effects from eliminating departments LO A1 [The following information applies to the questions displayed below.] Suresh Co. expects its five departments to yield the following income for next year. Dept. M $78,000 Dept. N $ 40,000 Dept. o $71,000 Dept. P $57,000 Dept. T $ 39,000 Total $285,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 15,300 56,200 71,500 $ 6,500 43,000 19,200 62,200 $(22,200) 21,900 5,300 27,200 $43,800 19,500 43,800 63,300 $(6,300) 47,700 17,500 65,200 L $(26,200) $147,400 $ 142,000 289,400 $ (4,400) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 23-10 Part 1 (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. o Dept. P Dept. I Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) 0 $ 0 $ 0 $ 0 $ (2) Management eliminates departments with sales dollars that are less than avoidable expenses. DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. O Dept. P D ept. I Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) $ 0 $ 0 $ 0 $ 0 $ 0 $