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Required information [The following information applies to the questions displayed below.] Suresh Company reports the following segment (department) income results for the year. Department M
Required information
[The following information applies to the questions displayed below.]
Suresh Company reports the following segment (department) income results for the year. Department M Department N $ 73,000 $ 39,000 Department 0 Department P $ 66,000 $ 48,000 Sales Expenses Avoidable Unavoidable Total expenses Income (loss) 12,800 54,200 67,000 $ 6,000 Total increase in income 40,000 16,200 56,200 $ (17,200) 24,200 4,800 29,000 $ 37,000 17,000 37,000 54,000 $ (6,000) Department T $ 34,000 43,200 14,000 57,200 $ (23,200) Total $ 260,000 137,200 126,200 263,400 $ (3,400)
a. if the company plans to eliminate departments that have sales less rhan avoidable costs, which department(s) would be eliminated?
b. Compute the total increase in income if the departments with sales less than avoidable costs, as identified in part a, are eliminated.
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