Exercise 26-7 Your answer is partially correct. Try again. 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 $25,500." The Other Percy Five Divisions Division Total Sales Cost of goods sold Gross profit Operating expenses Net income $1,663,000 $100,000 $1,763,000 977,000 76,000 1,053,000 686,000 24,000 710,000 575,500 $160,000 (25,00 $134,500 526,000 49,500 In the Percy Division, cost of goods sold is $59,000 variable and $17,000 fixed, and operating expenses are $29,000 variable and $20,500 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).) Net Income Increase (Decrease) Continue Eliminate Sales 100900 100900 Variable costs Cost of goods sold 59500 59500 Operating expenses 31000 31000 Total variable 95000 95000 Contribution margin 10400 -10400 Fixed costs Cost of goods sold 17300 17300 Operating expenses 19200 19200 Total fixed 36500 36500 Net income (loss) 26100 36500 -10400