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Zachary Company operates three segments. Income statements for the segments imply that profitability could be...

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Accounting

Zachary Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated.
ZACHARY COMPANY
Income Statements for Year 2
Segment A B C
Sales $ 166,000 $ 249,000 $ 254,000
Cost of goods sold (129,000)(84,000)(92,000)
Sales commissions (19,000)(24,000)(22,000)
Contribution margin 18,000141,000140,000
General fixed operating expenses (allocation of presidents salary)(35,000)(35,000)(26,000)
Advertising expense (specific to individual divisions)(3,000)(15,000)0
Net income (loss) $ (20,000) $ 91,000 $ 114,000
Required
Prepare a schedule of relevant sales and costs for Segment A.
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.
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