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Required information [The following information applies to the questions displayed below.) Suresh Co. expects its five departments to yield the following income for next year.
Required information [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 $73,000 Dept. N $ 39,000 Dept. o $66,000 Dept. P $48,000 Dept. T $ 34,000 Total $ 260,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 12,800 54,200 67,000 $ 6,000 40,000 16,200 56,200 $(17.280) 24,200 4,800 29,000 $37,000 17,000 37,000 54,000 $(6,000) 43,200 14,000 57,200 $(23,200) 137,200 126,200 263,400 $ (3,400) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. O Dept. P D ept. I Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) (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. I Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)
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