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Part B 10 Marks Intune Global's Finance and Accounting Manager has recently received the financial statements of its food supply division which has a chain of groceries with three main departments: Meats; Groceries and Produce. Last year's results showed the following: Meat $ 45,000 35,000 10,000 Groceries $ 15,000 9,000 6,000 Produce $ 9,000 7,000 2,000 Totals S 69,000 51,000 18,000 Sales Less: Variable Costs Contribution Margin Less: Fixed Costs Salaries Utilities & Miscellaneous Administration Total Fixed Costs Net Operating Income / (Loss) 3,000 1,400 2,600 7,000 3,000 2,450 550 1,600 4,600 1,400 1,150 850 1,000 3,000 (1,000) 6,600 2,800 5,200 14,600 3,400 The following additional information is supplied about the fixed costs: i. Salaries - 40% of the staff employed in the Produce department will be transferred to other departments. The remainder will be dismissed. ii. Administration - There will be an overall saving of $350 in these costs. iii. There will be no reduction in the Utilities & Miscellaneous Costs. The CEO of Intune Global Corp. is of the view that the Produce Department should be eliminated as it continues to suffer losses. However, the Finance and Accounting Manager disagrees with this position. Required: Prepare an analysis showing whether it is more profitable to eliminate the Produce department 10 Marks