Stuart Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. STUART COMPANY Income Statements for Year 2 Segment Sales $ 167,000 (127,000) 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 (loss) $241,000 (82,000) (31,000) 128,000 (44,000) (3,000) (12,000) $ (20,000) $ 72,000 $258,000 (90,000) (26,000) 142,000 (30,000) (19,000) 21,000 (38,000) $112,000 Required: JFZ Note: This question is very_ similar to a Connect HW assign (and the related Prof. Zeigler video discussion). 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.

Stuart Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. STUART COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold Sales conmissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net Income (loss) A B $ 167,000 $241,000 (127,000) (82,000) (19,600) (31,000 21, eee 128, eee (38,eee) (44,000) (3,eee) (12,eee) $ (20,000) $ 72,000 C $258,eee (ge, eee) (26,000) 142, eee (30,000) $112, eee Required: JFZ Note: This question is very similar to o Connect HW assign (and the related Prof. Zeigler video discussion). 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