Wintrust Corporation has three divisions. A recent accounting graduate from McWade University evaluated the operating performance of the three divisions. The following presentation was made to Wintrust's Board of Directors. During the presentation, the new accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by $20,000, as shown in the analysis below.

	Other Two Divisions	Southern Division	Total
Sales	$1,000,000	$300,000	$1,300,000

Cost of Goods Sold

650,000

200,000

850,000

Gross Profit

350,000

100,000

450,000

Operating Expenses

100,000

120,000

220,000

Net Income

$ 250,000

$ (20,000)

$ 230,000

Cost of goods sold is 80% variable and operating expenses are 70% variable. If the division is eliminated, 40% of the fixed costs will be eliminated.

Instructions Do you concur with the new accountant's recommendation? Present a schedule to support your answer.