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Karen Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Crane Company's six divisions. Karen made the following presentation to Crane's
Karen Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Crane Company's six divisions. Karen made the following presentation to Crane'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 $26,100." In the Percy Division, cost of goods sold is $59,000 variable and $17,000 fixed, and operating expenses are $29,100 variable and $21,100 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Karen 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).)
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