Barbara Jones, a recent graduate of Marx Universitys accounting program, evaluated the operating performance of Metlock Companys six divisions. Barbara made the following presentation to Metlocks board of directors and suggested the Erie division be eliminated. If the Erie division is eliminated, she said, our total profits would increase by $ 24,000.

		The Other Five Divisions				Erie Division				Total
Sales			$ 1,665,000				$ 100,400			$ 1,765,400
Cost of goods sold			978,200				76,300			1,054,500
Gross profit			686,800				24,100			710,900
Operating expenses			528,500				48,100			576,600
Net income			$ 158,300				$( 24,000)			$ 134,300

In the Erie division, the cost of goods sold is $ 60,000 variable and $ 16,300 fixed, and operating expenses are $ 16,000 variable and $ 32,100 fixed. None of the Erie division's fixed costs will be eliminated if the division is discontinued. Is Barbara right about eliminating the Erie Division? Prepare a schedule to support your answer. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).)

		Continue		Eliminate		Net Income Increase (Decrease)
select an item SalesVariable costsFixed costsContribution marginNet income / (loss)		$ enter a dollar amount		$ enter a dollar amount		$ enter a dollar amount
select an item Fixed costsSalesVariable costsNet income (loss)Contribution margin		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part Variable costsContribution marginNet income (loss)SalesFixed costs		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts
select an item Variable costsSalesFixed costsNet income (loss)Contribution margin		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a closing name for this statement Contribution marginVariable costsSalesNet income (loss)Fixed costs		$ enter a total net income or loss amount		$ enter a total net income or loss amount		$ enter a total net income or loss amount

Barbara is

select an option correct.incorrect.