QUESTION 10 Queen Bakery has two divisions, the cake division and the bread division. The cake division makes various types of cakes for various occasions. The bread division makes various types of bread that are sold in their front shop bakery. The company is considering disposing of the cake Division since it has been consistently unprofitable for a number of years. The income statements for the two divisions for the year ended June 30, 2021, are presented below: Cake Sales Bread Total Cost of Goods sold Gross profit Selling & Admin Expenses Net income RM98,500 RM275,000 RM373,500 55,000 43,500 109,000 266,000 164,000 309,500 50,000 65,000 115,000 (RM6,500) RM201,000 RM194,500 In the cake division, 65% of the cost of goods sold are variable costs and 60% of selling and administrative expenses are variable costs. The management of the company feels it can save RM17,000 of fixed cost of goods sold and RM9,300 of fixed selling expenses if it discontinues operation of the cake division. Instructions Determine whether the company should discontinue operating the cake division.