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! Required information Exercise 23-9 Analyzing income effects from eliminating departments LO P4 [The following information applies to the questions displayed below.) Suresh Co. expects its five departments to yield the following income for next year. Dept. M. $82,000 Dept. N $ 44,000 Dept. o $78,000 Dept. P $ 65,000 Dept. T $ 43,000 Total $312,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 17,300 57,800 75,100 $ 6,900 45,400 21,600 67,000 $(23,000) 18,000 5,700 23,700 $54,300 21,500 54,300 75,800 $(10,800) 51,300 20,300 71,600 $(28,600) 153,500 159,700 313,200 $ (1,200) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 23-9 Part 1 (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. o Dept. P. Dept. T 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. Dept. T Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)