Veronica Mars, a recent graduate of Bells accounting program, evaluated the operating performance of Cullumber Companys six divisions. Veronica made the following presentation to Cullumbers board of directors and suggested the Percy Division be eliminated. If the Percy Division is eliminated, she said, our total profits would increase by $ 26,200.

		The Other Five Divisions		Percy Division			Total
Sales		$ 1,663,000		$ 100,100			$ 1,763,100
Cost of goods sold		978,600		76,800			1,055,400
Gross profit		684,400		23,300			707,700
Operating expenses		526,000		49,500			575,500
Net income		$ 158,400		$ ( 26,200	)		$ 132,200

In the Percy Division, cost of goods sold is $ 59,300 variable and $ 17,500 fixed, and operating expenses are $ 31,400 variable and $ 18,100 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

	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 select an option incorrect/correct