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Kogan Company has two divisions whose most recent financial statements are shown below: Commercial Residential Division Division 10,000 2.000 Unit sales Sales $800,000 $200,000 Less:

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Kogan Company has two divisions whose most recent financial statements are shown below: Commercial Residential Division Division 10,000 2.000 Unit sales Sales $800,000 $200,000 Less: cost of goods sold: Unit-level production costs 350,000 120,000 Depreciation, production equipment 150,000 50,000 Gross margin $300,000 $ 30,000 Less: operating expenses: Unit-level selling and administrative 80,000 20,000 Corporate-level facility costs (fixed) 25,000 15,000 Net income (loss) $195,000 ($ 5,000) Required: 1) Compute the impact on profit if the Residential Division is eliminated. 2) Do you recommend that Kogan eliminate the Residential Division

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