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Current Attempt in Progress Susan Wilson, a recent graduate of Lawn University's accounting program, evaluated the operating performance of Bramble Company's six divisions. Susan
Current Attempt in Progress Susan Wilson, a recent graduate of Lawn University's accounting program, evaluated the operating performance of Bramble Company's six divisions. Susan made the following presentation to Bramble'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 $23,800." The Other Five Divisions Erie Division Total Sales $1,663,000 $100,300 $1,763,300 Cost of goods sold 978,800 76,300 1,055,100 Gross profit 684,200 24,000 708,200 Operating expenses 528,500 47,800 576,300 Net income $155,700 $(23,800) $131,900 In the Erie division, the cost of goods sold is $59,300 variable and $17,000 fixed, and operating expenses are $15,500 variable and $32,300 fixed. None of the Erie division's fixed costs will be eliminated if the division is discontinued. Is Susan 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).) Is Susan right about eliminating the Erie Division? Prepare a schedule to support your answer. (If an amount reduces the net income th enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Susan is $ Continue Net Income Eliminate Increase (Decrease) $ $ $ $ $
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