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Vernon Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. VERNON COMPANY Income Statements
Vernon Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. VERNON COMPANY Income Statements for Year 2 Segment A B C Sales $ 165,000 $ 242,000 $ 245,000 Cost of goods sold (129,000 ) (84,000 ) (93,000 ) Sales commissions (16,000 ) (31,000 ) (28,000 ) Contribution margin 20,000 127,000 124,000 General fixed operating expenses (allocation of presidents salary) (42,000 ) (34,000 ) (39,000 ) Advertising expense (specific to individual divisions) (6,000 ) (12,000 ) 0 Net income (loss) $ (28,000 ) $ 81,000 $ 85,000 Required Prepare a schedule of relevant sales and costs for Segment A. Prepar
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