Exercise 20-15 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 $27,200." Sales Cost of goods sold Gross profit Operating expenses Net income 977,400 687,600 23,200 528,700 50,400 $158,900 $ (27,200) The Other Percy Five Divisions Division $1,665,000 $100,100 $1,765,100 76,900 1,054,300 710,800 Total 579,100 $131,700 In the Percy Division, cost of goods sold is $60,000 variable and $16,900 fixed, and operating expenses are $30,800 variable and $19,600 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued.