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View Policies Current Attempt in Progress Karen Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Crane Company's six divisions Karen
View Policies Current Attempt in Progress Karen Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Crane Company's six divisions Karen made the following presentation to Crane'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 $1,665,000 $100,100 $1,765,100 Cost of goods sold 978,300 76,000 1,054,300 Gross profit 686,700 24,100 710,800 Operating expenses 526,800 50,200 577,000 Net income $159,900 $(26,100) $133,800 In the Percy Division, cost of goods sold is $59.000 variable and $17,000 fixed, and operating expenses are $29,100 variable and $21,100 fixed. None of the Percy Division's foxed costs will be eliminated if the division is discontinued. Is Karen right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number eg-45 or parentheses e.g. (45)) 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) Karen is Continue Eliminate $ correct eTextb a incorrect Net Income Increase (Decrease) 1A
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