Ex. 199 A recent accounting graduate from Marvel State University evaluated the operating performance of Fanning Company's four divisions. The following presentation was made to Fanning's Board of Directors. During the presentation, the accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by $60,000. (See analysis below.) Southern Division $480,000 400.000 80,000 140.000 S (60,000) Other Three Divisions $2,000,000 950,000 1,050,000 800,000 $ 250,000 Total $2,480,000 1,350,000 1,130,000 940,000 $ 190,000 Sales Cost of Goods Sold Gross Profit Operating Expenses Net Income For the other divisions, cost of goods sold is 80% variable and operating expenses are 70% variable. The cost of goods sold for the Southern Division is 30% fixed, and its operating expenses are 75% fixed. If the division is eliminated, only $15,000 of the fixed operating costs will be eliminated. Instructions Do you concur with the new accountant's recommendation? Present a schedule to support your answer. ninh Madi um Min: 20. AACSB: Analytic, AICPA BB: Resource Management, AICPA FN: Decision Modeling. AICPA PC: Including reference in your resume anticipates the 5. and removes a potential barrier to your getting the job. A) Job's needs B) Employee's needs C) Referee's needs D) Employer's needs