Answer:
(1) Because of the eliminations of Dept. N, Dept. P, and Dept. T, we have:
Total net loss = $35,000
(2) Because of the eliminations of Dept. N, and Dept. T, we have:
Total net income = $8,500
Explanation:
(1) Management eliminates departments with expected net losses.
Note: See answer (1) in the attached excel file for the eliminated departments (in red color).
From the answer (1) in the attached excel, the eliminated departments base on this are Dept. N, Dept. P, and Dept. T.
It can be seen from the answer (1) in the attached excel that because of the eliminations of Dept. N, Dept. P, and Dept. T, we have:
Total net loss = $35,000.
(2) Management eliminates departments with sales dollars that are less than avoidable expenses.
Note: See answer (2) in the attached excel file for the eliminated departments (in red color).
From the answer (2) in the attached excel, the eliminated departments base on this are Dept. N, and Dept. T.
It can be seen from the answer (2) in the attached excel that because of the eliminations of Dept. N, and Dept. T, we have:
Total net income = $8,500
