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Scroll down to complete all parts of this task. Company ABC has three product lines in its retail stores: cloth, auto, and hardware. Currently management
Scroll down to complete all parts of this task. Company ABC has three product lines in its retail stores: cloth, auto, and hardware. Currently management is considering whether to discontinue a segment(s). Based on the information in the exhibit, complete the income statements after the product line(s) is dropped. Indicate negative amounts with a leading minus (-) sign. Express costs and net loss as negative numbers. Letter To: Tom McFerran, CEO From: Eason Mitts, Product Department Manager Subject: Dropping Segments Date: June 10, Year 6 Dear Tom, The product department is considering discontinuance of one or two segments. The allocated fixed costs are based on units sold and are unavoidable. The following are the results of the analysis: Please help us evaluate the effect on net income of discontinuing any segment. Best, Eason
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