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Pharoah Company has four operating divisions. During the first quarter of 2022 , the company
reported aggregate income from operations of $207,000 and the following divisional results.
Analysis reveals the following percentages of variable costs in each division. Discontinuance of
any division would save 50% of the fixed costs and expenses for that division. Top management
is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the
divisions should be discontinued.
Prepare a columnar condensed income statement for Pharoah Company, assuming Division II is
eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing
divisions. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or
parentheses e.g. (45).)

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Pharoah Company has four operating divisions. During the first quarte.pdf

  • 1. Pharoah Company has four operating divisions. During the first quarter of 2022 , the company reported aggregate income from operations of $207,000 and the following divisional results. Analysis reveals the following percentages of variable costs in each division. Discontinuance of any division would save 50% of the fixed costs and expenses for that division. Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued. Prepare a columnar condensed income statement for Pharoah Company, assuming Division II is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)