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points Karm Ahmed, a recent graduate of an accounting p presentation e Lunar board of directors and sug by $20,000 evaluated the operating performance of
points Karm Ahmed, a recent graduate of an accounting p presentation e Lunar board of directors and sug by "$20,000" evaluated the operating performance of Lunar Company's four divisions Karim Ahmed made the following Riffa Division be eliminated if tha Division is eliminated." she said I profits would incase The Other Four Riffa Divisions Division Sales $1,600,000 $110,000 Cost of goods sold 950,000 80,000 Gross profit 650,000 30,000 Operating expenses 500,000 50,000 Net income $150,000 ($20,000) In the Riffa Division, cost of goods sold is $65,000 variable and $15,000 faxed, and operating expenses are $40,000 vanable and $10,000 fixed None of the Rita Division's fixed costs will be eliminated if the division is discontinued Required: (1) Prepare an incremental analysis to eliminate or keep a division decision marks) (2) is Karim Ahmed right about eliminating the Riffa Division? Why or why not? (15 marks)
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