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Exercise 20-15 Veranica Mars, a recent graduate of bell's accounting program, evaluated the aperating performance of Dunn Company's six divisions. Veronica made the following presentation
Exercise 20-15 Veranica Mars, a recent graduate of bell's accounting program, evaluated the aperating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn's board of directors and suggested the Ferry Division be eliminated. "If the Percy Division is eliminated," she said, "our total prafits would increase by $25,700." Sales Cost of goods sold Gross profit Operating expenses Net Income The Other Percy Five Divisions Division Total $1,613,000 $100,400 $1,763,400 977,000 76,200 1,053,200 696,000 24,200 710,200 529,400 49,900 578,300 S157,500 $ (75,700) $131,9%10 In the Percy Division, cost of goods sold is $59,100 variable and $17,100 fixed, and aperating expenses are $30,500 vanatic and $19,400 fixed. None of the Percy Division's fixed costs will se 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 c.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease Continue Eliminate $ S $ Sales Variable costs Cast of goods sold Operating expenses Total variable Contribution margin Fxed costs Cost of Quods sold Operating expenses Tatal fixed Net income (loss) Veronica is
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