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Rundle Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. RUNDLE COMPANY Segment Sales
Rundle Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. RUNDLE COMPANY Segment Sales Cost of goods sold Sales commissions Contribution margin Income Statements for Year 2 A B $171,000 $248,000 $246,000 (129,000) (92,000) (79,000) (17,000) (22,000) (23,000) 25,000 134,000 144,000 (40,000) (47,000) (4,000) (16,000) (31,000) e General fixed operating expenses (allocation of president's salary). Advertising expense (specific to individual divisions) Net income (loss) $ (19,000) $ 71,000 $113,000 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. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Sales Relevant Rev. and Cost items for Segment A Cost of goods sold Advertising expense Sales commissions Effect on income. $ 0 < Required A Required B > Complete this question by entering your answers in the tabs below. 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. RUNDLE 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 $ 0 General fixed operating expenses Advertising expense Net Income $ 0 $ 0 < Required A Required >
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