Laura Mars, a recent graduate of Bells accounting program, evaluated the operating performance of Wildhorse Companys six divisions. Laura made the following presentation to Wildhorses 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 Laura 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		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Variable costs
Cost of goods sold		enter a dollar amount		enter a dollar amount		enter a dollar amount
Operating expenses		enter a dollar amount		enter a dollar amount		enter a dollar amount
Total variable		enter a total amount for section one		enter a total amount for section one		enter a total amount for section one
Contribution margin		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part
Fixed costs
Cost of goods sold		enter a dollar amount		enter a dollar amount		enter a dollar amount
Operating expenses		enter a dollar amount		enter a dollar amount		enter a dollar amount
Total fixed		enter a total amount for section two		enter a total amount for section two		enter a total amount for section two
Net income (loss)		$enter a total net income or loss amount		$enter a total net income or loss amount		$enter a total net income or loss amount

Laura is select an option incorrect or correct