[The following information applies to the questions displayed below.] Recompute

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[The following information applies to the questions displayed below.]

   

Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios.

Management eliminates departments with sales dollars that are less than avoidable expenses.

     

Suresh Co. expects its five departments to yield the following income for next year. IThe following Information applies to the questions displayed below.] Suresh Co. expects its five departments to yield the following income for next year Dept. M Dept. P Total Dept. T $28,000 Dept. N Dept. O Sales Expenses $ 63.000 35,000 $56,000 42,000 $224.000 36,400 Avoidable Unavoidable 9.800 51.800 22.400 4,200 14,000 37800 120.400 12.600 49,000 Net income(oss 1400 (14,000) 29.400 43.400 $29,400 1.400) 9,800 107.800 228,200 $(19,600) (4,200) Total expenses 61600 26,600 47,600 Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios

Explanation / Answer

DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. O Dept. P Dept. T Total Sales 63000 56000 42000 161000 Expenses: Avoidable 9,800 22,400 14,000 46200 Unavoidable 51,800 12,600 4,200 29,400 9,800 107800 Total expenses 61,600 12,600 26,600 43,400 9,800 1,54,000 Net income (loss) 1,400 -12,600 29,400 -1,400 -9,800 7,000

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