King Company has two divisions whose most recent financial statements are shown below: Commercial Division Residential Division Unit sales Sales Less: cost of goods sold: Unit-level production costs Depreciation, production equipment Gross margin 5,340 $417,000 1,340 $117,000 176,700 61,700 83,500 33,500 $156,800 $21,800 Less: operating expenses: Unit-level selling and administrative 41,700 11,700 Corporate-level facility costs (fixed) 21,000 16,000 $94,100 $(5,900) Net income (loss) Required: a. Compute the impact on profit if the Residential Division is eliminated. Unit sales Sales Less: cost of goods sold: Unit-level production costs Depreciation, production equipment Gross margin Less: operating expenses: Unit-level selling and administrative Corporate-level facility costs (fixed) Net income (loss) Commercial Division b. Do you recommend that King eliminate the Residential Division? Yes No