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E21-15 Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to
E21-15 Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn'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 $26,000." Use incremental analysis concerning elimination ofdivision. (LO 6) XLS 2 21 Incremental Analysis The Other Five Divisions $1,664,200 978,520 685,680 527,940 157,740 Percy Division 100,000 Sales Cost of goods sold Gross profit Operating expenses Net income Total $1,764,200 1,054,520 709,680 577,940 76,000 24,000 50,000 $ (26,000) 131,740 In the Percy Division, cost of goods sold is $61,000 variable and $15,000 fixed, and operat- ing expenses are $30,000 variable and $20,000 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued Instructions Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your
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