Nicole Filippas, a recent graduate of Rollings Universitys accounting program, evaluated the operating performance of Poway Companys six divisions. Nicole made the following presentation to Poways board of directors and suggested the Erie division be eliminated. If the Erie division is eliminated, she said, our total profits would increase by $24,300.

		The Other Five Divisions				Erie Division				Total
Sales			$1,664,500				$100,500			$1,765,000
Cost of goods sold			978,100				76,300			1,054,400
Gross profit			686,400				24,200			710,600
Operating expenses			526,500				48,500			575,000
Net income			$159,900				$(24,300	)		$135,600

In the Erie division, the cost of goods sold is $59,600 variable and $16,700 fixed, and operating expenses are $15,900 variable and $32,600 fixed. None of the Erie division's fixed costs will be eliminated if the division is discontinued. Is Nicole right about eliminating the Erie Division? Prepare a schedule to support your answer. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).)

		Continue		Eliminate		Net Income Increase (Decrease)
select an account title SalesFixed costsVariable costsContribution marginNet income / (loss)		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select an account title SalesFixed costsVariable costsNet income (loss)Contribution margin		enter a dollar amount		enter a dollar amount		enter a dollar amount