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Zachary Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. ZACHARY COMPANY Income Statements
Zachary Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. ZACHARY COMPANY Income Statements for Year 2 Segment B Sales $ 172,000 $ 248,000 $ 264,000 Cost of goods sold (125,000] (79,000) [92,000] Sales commissions (21,000] [26,000 [24,000) Contribution margin 26,000 143,000 148,000 General fixed operating expenses (allocation of president's salary) 40,000) 51,000] 37,000 Advertising expense (specific to individual divisions) (4,000] 15,000 Net income (loss] $ (18,000] $ 77,000 $ 111,000 Required 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. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Sales Effect on income
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