Question: Peruna Company is evaluating its two divisions, North Division and South Division. Data for North Division include sales of $530,000, variable costs of $290,000, and

Peruna Company is evaluating its two divisions, North Division and South Division. Data for North Division include sales of $530,000, variable costs of $290,000, and fixed costs of $260,000, 50 percent of which are traceable to the division. South Division’s efforts for the same period include sales of $610,000, variable costs of $340,000, and fixed costs of $290,000, 60 percent of which are traceable to the division. Should Peruna Company consider eliminating either division? Is there any other problem that needs attention?

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