Suresh Co. expects its five departments to yield the following income for next year.

Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios: Management
(1) Does not eliminate any department,
(2) Eliminates departments with expected net losses,
(3) Eliminates departments with sales dollars that are less than avoidable expenses. Explain your answers to parts 2 and3.

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Dept. M Dept. N Dept O Dept. P Dept. T $63,000 $35,000 $56,000 $42,000 $28,000 Sales Expenses 9,800 36,400 22,400 14,000 37,800 Unavoidable 51,800 12,600 4,200 29,400 9,800 Total expenses 61,600 49,000 26,600 43,400 47,600 Net income (loss 1,400 $(14,000) $29,400 $(1,400) $ (19,600) Avoidable