The Other Five Divisions Percy Division Total Sales $1,663,000 $100,300 $1,763,300 Cost of goods sold 978,700 76,800 1,055,500 Gross profit 684,300 23,500 707,800 Operating expenses 527,700 50,500 578,200 Net income $156,600 $ (27,000 ) $129,600 In the Percy Division, cost of goods sold is $60,000 variable and $16,800 fixed, and operating expenses are $30,800 variable and $19,700 fixed. None of the Percy Divisions fixed costs will be eliminated if the division is discontinued. Is Veronica 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 $ $ $

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)

Veronica is