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. $75,000 Dept. N $ 41,000 Dept. o $68,000 Dept. P $51,000 Dept. T $ 36,000 Total $ 271,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 13,800 55,000 68,800 $ 6,200 41,200 17,400 58,600 $(17,600) 21,000 5,000 26,000 $42,000 18,000 42,000 60,000 $(9,000) 45,000 15,400 60,400 $(24,400) 139,000 134,800 273,800 $ (2,800) 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 onments with expected net losses Required information (1) Management eliminates departments with expected net losses DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. o Dept.P Total Dept. T $ 0 Sales 0 Expenses: Avoidable 0 Unavoidable 0 0 0 $ $ $ 0 Total expenses Net income (loss) 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 Dept. M Dept. N Dept. o Dept. P Dept. T Total $ 0 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 0 0 $ 0 $ 0 $ 0$ 0 $ 0 $ 0 Exercise 23-8 Income analysis of eliminating departments LO P4 Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment. $2,700,000 MARINETTE COMPANY Income Statement-Canoe Segment Sales Variable costs Direct materials $ 590,000 Direct labor 640,000 Variable overhead 440,000 Variable selling and administrative 270,000 Total variable costs Contribution margin Fixed costs Direct 515,000 Indirect 440,000 Total fixed costs Net income 1,910,000 760,000 955,000 $ (195,000) 1. If canoes are discontinued, calculate the net income lost or gained 2. Should management discontinue the manufacturing of canoes? munetinn hantering vnur answers in the tabs below. Required 1 Required 2 If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Ente Keep the department Eliminate the department Sales Expenses: Total expenses Net income (loss) 0