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Current Attempt in Progress Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Blossom Company's six divisions. Veronica made the
Current Attempt in Progress Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Blossom Company's six divisions. Veronica made the following presentation to Blossom's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $26,900." Total The Other Five Divisions $1,665,000 978,700 Percy Division $100,600 77,000 Sales $1,765,600 1,055,700 Cost of goods sold Gross profit Operating expenses Net income 686,300 527,200 $159,100 23,600 50,500 $(26,900) 709,900 577,700 $132,200 In the Percy Division, cost of goods sold is $59,200 variable and $17,800 fixed, and operating expenses are $31,600 variable and $18,900 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate Sales $ $ $ Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) $ $ $ Veronica is
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