Sharon Lee, a recent graduate of Bell's accounting program, evaluated the operating performance of Carla Vista...
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Sharon Lee, a recent graduate of Bell's accounting program, evaluated the operating performance of Carla Vista Company's six divisions. Sharon made the following presentation to Carla Vista'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 $25,300." The Other Five Divisions Percy Division Total $1,663,000 $100,900 $1,763,900 Sales Cost of goods sold 978,400 76,500 1,054,900 709,000 Gross profit Operating expenses 684,600 24,400 528,500 49,700 $156,100 $ (25,300) 578,200 $130,800 Net income In the Percy Division, cost of goods sold is $60,100 variable and $16,400 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division's fixed costs will be eliminated the division is discontinued. Is Sharon 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).) Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) Sharon is Continue Eliminate Net Income Increase (Decrease) Sharon Lee, a recent graduate of Bell's accounting program, evaluated the operating performance of Carla Vista Company's six divisions. Sharon made the following presentation to Carla Vista'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 $25,300." The Other Five Divisions Percy Division Total $1,663,000 $100,900 $1,763,900 Sales Cost of goods sold 978,400 76,500 1,054,900 709,000 Gross profit Operating expenses 684,600 24,400 528,500 49,700 $156,100 $ (25,300) 578,200 $130,800 Net income In the Percy Division, cost of goods sold is $60,100 variable and $16,400 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division's fixed costs will be eliminated the division is discontinued. Is Sharon 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).) Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) Sharon is Continue Eliminate Net Income Increase (Decrease)
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Percy Division continue Particulars Sales a 100900 variable costs cost of goods sold 60100 oper... View the full answer
Related Book For
Accounting Principles
ISBN: 978-1119419617
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
Posted Date:
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