Exercise 7-15 Veronica Mars, a recent graduate of Bells accounting program, evaluated the operating performance of Dunn Companys six divisions. Veronica made the following presentation to Dunns board of directors and suggested the Percy Division be eliminated. If the Percy Division is eliminated, she said, our total profits would increase by $24,900. The Other Five Divisions Percy Division Total Sales $1,665,000 $100,900 $1,765,900 Cost of goods sold 977,500 76,100 1,053,600 Gross profit 687,500 24,800 712,300 Operating expenses 527,500 49,700 577,200 Net income $160,000 $ (24,900 ) $135,100 In the Percy Division, cost of goods sold is $60,400 variable and $15,700 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Divisions 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).) Continue Eliminate Net Income Increase (Decrease) Sales $ $ $ Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) $ $ $ Veronica is