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Prepare a schedule of relevant sales and costs for segment

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Reference no: EM132466047

Jordan Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated.
                                    JORDAN COMPANY  Income Statements for the Year 2018

Segment

 

A

B

C

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

$ 166,000

(121,000)

(15,000)

$253,000 (79,000) (27,000)

$247,000

(82,000)

(25,000)

30,000

(41,000)

(6,000)

147,000 (39,000) (10,000)

140,000

(30,000)

0

$ (17,000)

$ 98,000

$110,000

Required

Question 1: a schedule of relevant sales and costs for Segment A.

Question 2: 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.

Reference no: EM132466047

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