Suresh Company reports the following segment (department) income results for the year. Department MDepartment NDepartment ODepartment PDepartment TTotalSales$ 77,000$ 39,000$ 70,000$ 56,000$ 38,000$ 280,000Expenses Avoidable14,80042,40021,60019,00046,800144,600Unavoidable55,80018,6005,20043,20016,800139,600Total expenses70,60061,00026,80062,20063,600284,200Income (loss)$ 6,400$ (22,000)$ 43,200$ (6,200)$ (25,600)$ (4,200) b. Compute the total increase in income if the departments with sales less than avoidable costs, as identified in part a, are eliminated.

Net Income - Net income is the remaining amount after costs of products sold and other expenses have…

Answered: ,000 $ 39,000 $ 70,000 $ 56,000 $…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 1CE

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Suresh Company reports the following segment (department) income results for the year.

	Department M	Department N	Department O	Department P	Department T	Total
Sales	$ 77,000	$ 39,000	$ 70,000	$ 56,000	$ 38,000	$ 280,000
Expenses
Avoidable	14,800	42,400	21,600	19,000	46,800	144,600
Unavoidable	55,800	18,600	5,200	43,200	16,800	139,600
Total expenses	70,600	61,000	26,800	62,200	63,600	284,200
Income (loss)	$ 6,400	$ (22,000)	$ 43,200	$ (6,200)	$ (25,600)	$ (4,200)

b. Compute the total increase in income if the departments with sales less than avoidable costs, as identified in part a, are eliminated.

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