Question 1 Karim Ahmed, a recent graduate of an accounting program, evaluated the operating performance of Lunar Company's four dations Karim Ahmed made the following presentation to the Lunar board of directors and suggested the fa Division be eliminated. If the Riffa Divion is elmenated" she said our total profits would increase by $20,000 The Other Four Divisions Bila Division Sales $1,000,000 $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 fixed, and operating expenses are $40,000 wariable and $10,000 fixed. None of the Riffa Division's fixed costs will be eliminated if the division is discontinued. ansirad Questions Filter (5) K First Last > Auhin Attempts Assessment security Grading Maximum points Additional Information Refresh the assessment tha you submit an amp Last saved 2:51:03 950,000 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 fixed, and operating expenses are $40,000 variable and $10,000 fixed. None of the Riffa 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. (6.5 marks) (2) Is Karim Ahmed right about eliminating the Riffa Division? Why or why not? (1.5 marks) Use the editor to format your answer Questions Filter (5) K First Last >