Required information Exercise 25-9 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 $63,000 Dept. N $ 35,000 Dept. o $56,000 Dept. P $ 42,000 Dept. T $ 28,000 Total $224,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 9,800 51,800 61,600 $ 1,400 36,400 12,600 49,000 $(14,000) 22,400 4,200 26,600 $ 29,400 14,000 29,400 43,400 $ (1,400) 37,800 9,800 47,600 $(19,600) 120,400 107,800 228, 200 $ (4,200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 25-9 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 0 Total expenses Net income (loss) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Exercise 25-9 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 Sales $ 0 Expenses: Avoidable 0 Unavoidable 0 0 Total expenses Net income (loss) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0