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Current Attempt in Progress Nicole Filippas, a recent graduate of Rollings University's accounting program, evaluated the operating performance of Poway Company's six divisions. Nicole made
Current Attempt in Progress Nicole Filippas, a recent graduate of Rollings University's accounting program, evaluated the operating performance of Poway Company's six divisions. Nicole made the following presentation to Poway's board of directors and suggested the Erie division be eliminated. "If the Erie division is eliminated," she said, "our total profits would increase by $ 23,400. The Other Five Divisions Erie Division Total Sales $ 1,663,500 $ 100,900 $ 1,764,400 Cost of goods sold 977,400 76.500 1,053,900 Gross profit 686,100 24,400 710,500 Operating expenses 529,000 47.800 576.800 Net income $ 157,100 $123,400) $ 133,700 In the Erie division, the cost of goods sold is $ 60,200 variable and $ 16,300 fixed, and operating expenses are $ 15,800 variable and $ 32,000 fixed. None of the Erie division's fixed costs will be eliminated if the division is discontinued. Is Nicole 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, eg. (15,000).) In the Erie division, the cost of goods sold is $60,200 variable and $ 16,300 fixed, and operating expenses are $ 15,800 variable and $ 32,000 fixed. None of the Erie division's fixed costs will be eliminated if the division is discontinued. Is Nicole 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 eg.-15,000 or parenthesis, eg. (15,000).) Net Income Increase (Decrease) Continue Eliminate $ $ $ $ Nicole is
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