Betty Harris, a recent graduate of Bell's accounting program, evaluated the operating performance of Cullumber Company's...

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Betty Harris, a recent graduate of Bell's accounting program, evaluated the operating performance of Cullumber Company's six divisions. Betty made the following presentation to Cullumber'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 $26.500 The Other Percy Five Divisions Division Total Sales $1,663,000 $100,000 $1,763,000 Cost of goods sold 978.100 76.800 1,054,900 Gross profit 684,900 23,200 708,100 Operating expenses 529,000 49,700 578,700 Net income $155.900 $(26.500 ) $129,400 In the Percy Division, cost of goods sold is $60.500 variable and $16,300 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Betty right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase Continue Eliminate (Decrease) Betty Harris, a recent graduate of Bell's accounting program, evaluated the operating performance of Cullumber Company's six divisions. Betty made the following presentation to Cullumber'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 $26.500 The Other Percy Five Divisions Division Total Sales $1,663,000 $100,000 $1,763,000 Cost of goods sold 978.100 76.800 1,054,900 Gross profit 684,900 23,200 708,100 Operating expenses 529,000 49,700 578,700 Net income $155.900 $(26.500 ) $129,400 In the Percy Division, cost of goods sold is $60.500 variable and $16,300 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Betty right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase Continue Eliminate (Decrease)

Answer rating: 100% (QA)

Required Continue Eliminate Sales 100000 0 Variable costs Cost of goods sold 60500 0 ... View the full answer