Required information Exercise 23-9 Analyzing income effects from eliminating departments LO P4 [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 $81,000 Dept. N $ 43,000 Dept. o $77,000 Dept. P $62,000 Dept. T $ 42,000 Total $305,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 16,800 57,400 74,200 $ 6,800 44,800 21,000 65,800 $(22,800) 20,600 5,600 26,200 $50,800 21,000 50,800 71,800 $(9,800) 50,400 19,600 70,000 $(28,000) 153,600 154,400 308,000 $ (3,000) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 23-9 Part 1 (1) Management eliminates departments with expected net losses. Exercise 23-9 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. T Total Sales $ 0 Expenses: Avoidable 0 Unavoidable 0 Total expenses 0 $ 0 Net income (loss) $ 0 0 $ 0 Exercise 23-9 Part 2 (2) Management eliminates departments with sales dollars that are less than avoidable expenses. DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Total Dept. M Dept. N Dept. o Dept. P Dept. T LA 0 Sales Expenses: 0 Avoidable 0 Unavoidable 0 0 0 $ $ Total expenses Net income (loss) 0 $ 0 0 $