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 $ 24,000.

		The Other Five Divisions				Erie Division				Total
Sales			$ 1,665,000				$ 100,400			$ 1,765,400
Cost of goods sold			978,200				76,300			1,054,500
Gross profit			686,800				24,100			710,900
Operating expenses			528,500				48,100			576,600
Net income			$ 158,300				$( 24,000	)		$ 134,300

In the Erie division, the cost of goods sold is $ 60,000 variable and $ 16,300 fixed, and operating expenses are $ 16,000 variable and $ 32,100 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).)

Net Income Increase (Decrease) Continue Eliminate Sales $ 1765400 $ 1665000 $ -100400 Variable costs 1054500 994500 60000 Contribution margin 710900 670500 -40400 Fixed costs 576600 560600 16000 Net income (loss) $ 134300 $ 109900 $ -24400