Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn'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 $26,100."

The Other Five Divisions Percy Division Total

Sales $1,663,000 $100,900 $1,763,900

Cost of goods sold 977,300 76,800 1,054,100

Gross profit 685,700 24,100 709,800

Operating expenses 528,400 50,200 578,600

Net income $157,300 $ (26,100 ) $131,200

In the Percy Division, cost of goods sold is $59,500variable and $17,300fixed, and operating expenses are $31,000variable and $19,200fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued.

Is Veronica right about eliminating the Percy Division? Prepare 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

costs of goods sold

operating expenses

Total Fixed

Net income (loss)

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