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[The following information applies to the questions displayed below.] Suresh Co. expects its five departments to yield the following income for next year.

	Dept. M				Dept. N					Dept. O				Dept. P					Dept. T					Total
Sales		$	81,000			$	43,000				$	77,000			$	62,000				$	42,000			$	305,000
Expenses
Avoidable			16,800				44,800					20,600				21,000					50,400				153,600
Unavoidable			57,400				21,000					5,600				50,800					19,600				154,400
Total expenses			74,200				65,800					26,200				71,800					70,000				308,000
Net income (loss)		$	6,800			$	(22,800	)			$	50,800			$	(9,800	)			$	(28,000	)		$	(3,000	)

Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios.

(1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. o Dept. P Dept. T Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss) (2) Management eliminates departments with sales dollars that are less than avoidable expenses. DEPARTMENTS WITH LESS SALES THAN AVOIDABLE EXPENSES ELIMINATED Dept. M Dept. N Dept. o Dept. P. Dept. T Total Sales Expenses: Avoidable Unavoidable Total expenses Net income (loss)

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