7. (10 points) J.M Smucker Cormpany operates two dvsions the Fruit Preserves Division and the Snack Foods Divssion. The Fruit Preserves Division manufactures and sells jelly and jans to supermazkets. The Snack Foods Division se11s its products to theme parks. The company 9 considering diaposing of the Snack Foods Division since it has been consnatently unprofitable for a number of yeare. The income atatementa for the two divisions for the year ended Decembe: 31 2017 are presented below Fruit Preserves Division Snack Eoods Sales revenue Cost of goods sold Gross profit Selling & admin expenses Net income $1/500,000 900,000 600%000 250,000 500,000 350,000 150,000 180,000 Total $2,000,000 1250,000 750,000 In the Snack Foods Division, 60% of the cost of gooda sold are variable cost and 25% of selling and administrative expenses are variable costs. The management of the company feels it can save $60,000 of fixed cost of goods sold and $50,000 of fixed selling expenses if it discontinues operation of the Snack Foods Division. Instruetions (a) Deterine whether the company should diacontinue operating the Snack Foods Division. Prepare a achedule which aupporta your decis.on (b) It the company had diacontinued the division For 2017, determine what net income would have been