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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 Income Statements
Rooney Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated ROONEY COMPANY Income Statements for the Year 2018 Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income 169,000 248,000 $257,000 (131,000) (75,000) (84,000) (19,000) 19,000 (24,000)(24,000) 149,000 149,000 (42,000) (46,000) (37,000) 5.000 (16,000) $ (28,000) 87,000 $112,000 Required a. 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: (1) the retention of Segment A and (2) the elimination of Segment A. RequiredA Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Advertising expense Cost of goods sold General fixed operating expenses Sales Sales commissions Required A Required B Required A Required B Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. ROONEY COMPANY Comparative Income Statements for the Year 2018 Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income Keep Seg. A Eliminate Seg. A
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