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Question 8 of 8 - / 8 E View Policies Current Attempt in Progress Donna Mars, a recent graduate of Bell's accounting program, evaluated the

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Question 8 of 8 - / 8 E View Policies Current Attempt in Progress Donna Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Pharoah Company's six divisions. Donna made the following presentation to Pharoah's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $27,100." Percy The Other Five Divisions Division Total Sales $1,665,000 $100,100 $1,765,100 Cost of goods sold 978,700 76,700 1,055,400 Gross profit 686.300 23,400 709,700 Operating expenses 528,700 50,500 579,200 Net income $157,600 $(27,100) $130,500 In the Percy Division, cost of goods sold is $60,100 variable and $16,600 fixed, and operating expenses are $30,400 variable and $20,100 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Donna right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate Sales $ $ $ Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) $ $ $

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