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Suresh Co.

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Exercise 10-7: Analysis of income effects from eliminating departments L.O. C1, A1
Dept. M Dept. N Dept. O Dept. P Dept. T
Sales $63,000 $ 35,000 $56,000 $42,000 $ 28,000
Expenses
Avoidable 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)

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Exercise 10-7: Analysis of income effects from eliminating departments L.O. C1, A1
Suresh Co. expects its five departments to yield the following income for next year.

Dept. M Dept. N Dept. O Dept. P Dept. T
Sales 63,000 35,000 56,000 42,000 28,000
Expenses
Avoidable 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)

Recompute and prepare the departmental income statements (including a ...

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This solution is comprised of a detailed explanation to analyse of income effects from eliminating departments.

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