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Rooney Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated ROONEY COMPANY Incase Statements

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Rooney Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated ROONEY COMPANY Incase Statements for Year 2 Serent Sales Cost of goods sold Sales comissions Contribution margin General Fixed operating expenses allocation of president's salary) Advertising expense (specific to individual divisions) Net Income (los) 5.171.000 (129,000) (21,000 De $25,000 (37,000) (2.000) 153,000 (41,000) (10,000) $102,000 5252,000 (50,000 (31,000 133.000 (32.000) (42,000) 16.000) $ 27,000) 5101,000 Required 0. Prepare a schedule of relevant sales and costs for Segment A b. Prepare comparative income statements for the company as a whole under two alternatives the retention of Segment A and (2) the elimination of Segment A ROONEY COMPANY Comparative Income Statements for the Year 2 Decision Keep Seg. A Eliminate Seg. A Sales Cost of goods sold Sales commissions Contribution margin 0 $ General fixed operating expenses Advertising expense Net Income 0$ 0 $

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