MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Textbook Question
Chapter 10, Problem 10E
Suresh Co. expects its five departments to yield the following income for next year.
Recompute and prepare the departmental income statements (including a combined column) for the company under each of the following separate scenarios: Management (1) eliminates departments with expected net losses, and (2) eliminates departments with sales dollars that are less than avoidable expenses.
Explain your answers to parts 1 and 2.
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Students have asked these similar questions
[The following information applies to the questions displayed below.]
Suresh Company reports the following segment (department) income results for the year.
Department M Department N Department 0
$ 87,000
$ 47,000
$ 83,000
Department P
$ 69,000
Sales
Expenses
Avoidable
Unavoidable
Income (loss)
Total expenses
M
N
Department
Department
Department
Department
Department
Department
O
P
T
Answer is complete and correct.
Decision
a. If the company plans to eliminate departments that have sales less than avoidable costs, which department(s) would be eliminated?
Keep
Eliminate
Keep
18,800
59,000
77,800
$ 9,200
Keep
Eliminate
47,200
23,400
70,600
$ (23,600)
18,500
6,000
24,500
$ 58,500
23,000
58,500
81,500
$ (12,500)
Department T
$ 42,000
54,000
22,400
76,400
$ (34,400)
Total
$ 328,000
161,500
169,300
330,800
$ (2,800)
Fanning Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment
A were eliminated.
Segment
Sales
Cost of goods sold
Sales commissions
Contribution margin
General fixed operating expenses (allocation of president's salary)
Advertising expense (specific to individual divisions)
Net income (loss)
FANNING COMPANY
Income Statements for Year 2
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 Revenue and Cost Items for Segment A
Effect on income
$
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.
A
$ 169,000
(123,000)
(20,000)
26,000
(37,000)
(5,000)
$ (16,000)
0
B
$242,000
(92,000)
(32,000)
118,000
(35,000)
(19,000)
$ 64,000
с
$ 262,000…
Munoz Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment
A were eliminated.
Segment
Sales
Cost of goods sold
Sales commissions
MUNOZ COMPANY
Income Statements for Year 2
Contribution margin
General fixed operating expenses (allocation of president's salary)
Advertising expense (specific to individual divisions)
Net income (loss)
Complete this question by entering your answers in the tabs below.
A
$ 171,000
(123,000)
Required A Required B
Prepare a schedule of relevant sales and costs for Segment A.
Relevant Rev. and Cost items for Segment A
$251,000 $256,000
(91,000)
(81,000)
(24,000)
(23,000)
152,000
(40,000)
0
136,000
(17,000)
31,000
(34,000) (42,000)
(6,000) (16,000)
$ (9,000) $ 78,000
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…
Chapter 10 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 1DQCh. 10 - Is nonfinancial information ever useful in...Ch. 10 - What is a relevant cost? Identify the two types of...Ch. 10 - Prob. 4DQCh. 10 - Prob. 5DQ
Ch. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Signal mistakenly produced 1,000 defective cell...Ch. 10 - Prob. 10QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Rory Company has a machine with a book value of...Ch. 10 - Fill in each of the blanks below with the correct...Ch. 10 - Prob. 2ECh. 10 - Goshford Company produces a single product and has...Ch. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Suresh Co. expects its five departments to yield...Ch. 10 - Exercise 23-11 Sales mix A1 Childress Company...Ch. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 1PSACh. 10 - Calla Company produces skateboards that sell for...Ch. 10 - Prob. 3PSACh. 10 - Prob. 4PSACh. 10 - Prob. 5PSACh. 10 - Elegant Decor Companys management is trying to...Ch. 10 - Prob. 1PSBCh. 10 - Prob. 2PSBCh. 10 - Prob. 3PSBCh. 10 - Prob. 4PSBCh. 10 - Prob. 5PSBCh. 10 - Esme Companys management is trying to decide...Ch. 10 - Prob. 10SPCh. 10 - Apple currently chooses to buy (mainly from...Ch. 10 - Prob. 3BTNCh. 10 - Assume that you work for Greebles Department...Ch. 10 - Prob. 5BTNCh. 10 - Prob. 6BTNCh. 10 - Prob. 7BTNCh. 10 - Prob. 8BTNCh. 10 - Prob. 9BTN
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