Question no 2

The costs listed below relate to a variety of different decision situations. .. Sandra Robinson, a recent graduate of Marx University's accounting program, evaluated the operating performance of Blue Spruce Company's six divisions. Sandra made the following presentation to Blue Spruce's board of directors and suggested the Erie division be eliminated. "If the Erie division is eliminated," she said, "our total profits would increase by $24,300." In the Erie division, the cost of goods sold is $59,600 variable and $16,700 fixed, and operating expenses are $15,900 variable and $32,600 fixed. None of the Erie division's fixed costs will be eliminated if the division is discontinued. Is Sandra right about eliminating the Erie Division? Prepare a schedule to support your answer. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. 15,000 or parenthesis, e.g. (15,000).) Net Income Increase Sandra is