Segment elimination decision Chamberline Company operates three segments. Income statements for the


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Segment elimination decision Chamberline Company operates three segments. Income statements for the 1 answer below » Segment elimination decision Chamberline Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. View complete question » CHAMBERLINE COMPANY Income Statements for the Year 2011 Segment A B C Sales $162,000 $235,000 $245,000 Cost of goods sold (121,000) (92 Segment elimination decision Chamberline Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. CHAMBERLINE COMPANY Income Statements for the Year 2011 Segment A B C Sales $162,000 $235,000 $245,000 Cost of goods sold (121,000) (92,000) (95,000) Sales commissions (15,000) (22,000) (22,000) Contribution margin 26,000 121,000 128,000 General fixed oper. exp. (allocation of president’s salary) (44,000) (52,000) (44,000) Advertising expense (specific to individual divisions) (3,000) (10,000) 0 Net income $ (21,000) $ 59,000 $ 84,000 Required Explain the effect on profitability if Segment A is eliminated. Prepare comparative income statements for the company as a whole under two alternatives: the retention of Segment A and (2) the elimination of Segment A. View less » Sep 01 2015 02:12 PM

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