Sharon Lee, a recent graduate of Bells accounting program, evaluated the operating performance of Carla Vista Companys six divisions. Sharon made the following presentation to Carla Vistas board of directors and suggested the Percy Division be eliminated. If the Percy Division is eliminated, she said, our total profits would increase by $25,300.

		The Other Five Divisions		Percy Division			Total
Sales		$1,663,000		$100,900			$1,763,900
Cost of goods sold		978,400		76,500			1,054,900
Gross profit		684,600		24,400			709,000
Operating expenses		528,500		49,700			578,200
Net income		$156,100		$ (25,300	)		$130,800

In the Percy Division, cost of goods sold is $60,100 variable and $16,400 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Divisions fixed costs will be eliminated if the division is discontinued. Is Sharon 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).)

		Continue		Eliminate		Net Income Increase (Decrease)
Sales		$enter a dollar amount		$enter a dollar amount		$enter the difference between the two previous amounts in the row
Variable costs
Cost of goods sold		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Operating expenses		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Total variable		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts
Contribution margin		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part
Fixed costs
Cost of goods sold		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Operating expenses		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Total fixed		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts
Net income (loss)		$enter a total net income or loss amount		$enter a total net income or loss amount		$enter a total net income or loss amount

Sharon is select between correct and incorrect correctincorrect