12 of 13 < View Policies Current Attempt in Progress -/7 E ! Barbara Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Ivanhoe Company's six divisions. Barbara made the following presentation to Ivanhoe's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $25,700. The Other Five Divisions Percy Division Total Sales $1,663,000 $100,900 $1,763,900 Cost of goods sold 977,800 76,100 1,053,900 Gross profit 685,200 24,800 710,000 Operating expenses 526,900 50,500 577,400 Net income $158,300 $ (25,700) $132,600 In the Percy Division, cost of goods sold is $59,300 variable and $16,800 fixed, and operating expenses are $30,400 variable and $20,100 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Barbara right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) Continue Eliminate $ Net Income Increase (Decrease)