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Suresh Co. expects its five departments to yield the following income for next year. Dept. M $64,000 Dept. N $ 36,000 Dept. o $57,000 Dept.
Suresh Co. expects its five departments to yield the following income for next year. Dept. M $64,000 Dept. N $ 36,000 Dept. o $57,000 Dept. P $43,000 D ept. T $ 29,000 Total $229,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 10,300 52,200 62,500 $ 1,500 37,000 13,200 50,200 $(14,200) 22,700 4,300 27,000 $30,000 14,500 30,000 44,500 $(1,500) 38,700 10,500 49,200 $(20,200) 123,200 110,200 233,400 $ (4,400) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. I Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) (2) Management eliminates departments with sales dollars that are less than avoidable expenses. DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. O Dept. P D ept. I Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)
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