A recent accounting graduate evaluated the operating performance of Fanning Company's four divisions. The following presentation was made to Fanning's Board of Directors. During the presentation, the accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by 50,000. (See analysis below.)

	Other Three Divisions	Southern Division	Total
Sales	2,100,000	580,000	2,680,000
Cost of Goods Sold	1,250,000	450,000	1,700,000
Gross Profit	850,000	130,000	980,000
Operating Expenses	620,000	180,000	800,000
Net Profit	230,000	(50,000)	180,000

For the other divisions, cost of goods sold is 75% variable and operating expenses are 60% variable. The cost of goods sold for the Southern Division is 30% fixed, and its operating expenses are 65% fixed. If the division is eliminated, 40% of fixed cost of goods sold and 45% of the fixed operating costs will be eliminated.

Required:

A. Do you concur with the new accountant's recommendation? To support your answer, present a full incremental analysis schedule, with calculations, to compare the financial performance if Southern continues in the group or is eliminated.

B. Apart from the financial information, what non-financial information would you consider before making the final decision for this business case?