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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
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 C $ 167,000 (130,000) (19,000) $253,000 $246,000 (77,000) (92,000) (29,000) (27,000) 18,000 147,000 127,000 (44,000) (5,000) (43,000) (13,000) (34,000) 0 General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) $ (31,000) $ 91,000 $ 93,000 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.
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