Veronica Mars, a recent graduate of Bells accounting program, evaluated the operating performance of Dunn Companys six divisions. Veronica made the following presentation to Dunns board of directors and suggested the Percy Division be eliminated. If the Percy Division is eliminated, she said, our total profits would increase by $26,300.

		The Other Five Divisions		Percy Division			Total
Sales		$1,663,000		$101,000			$1,764,000
Cost of goods sold		979,000		76,900			1,055,900
Gross profit		684,000		24,100			708,100
Operating expenses		528,100		50,400			578,500
Net income		$155,900		$ (26,300	)		$129,600

In the Percy Division, cost of goods sold is $60,400 variable and $16,500 fixed, and operating expenses are $29,000 variable and $21,400 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.