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4A CD AFGH 1 E7-15 Use incremental analysis concerning elimination of division 2 Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance 3 of Dunn Company's six divisions. Veronica made the following presentation to Dunn's board of directors 4 and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our 5 total profits would increase by $26,000." Sales Cost of goods sold Gross Profit Operating expenses Net income The Other Five Divisions $1,664,200 978,520 685,680 527,940 $157 740 Percy Division $100,000 76,000 24,000 50,000 ($26,000 Total $1,764,200 1,054,520 709,680 577 940 $131,740 15 in the Percy Division, cost of goods sold is $61,000 variable and $15,000 foed, and operating expenses 16 are $30,000 variable and $20,000 fixed. None of the Percy Division's fixed costs will be eliminated if the 17 division is discontinued. 18 19 Instructions 20 s Veronica right about eliminating the Percy Division? Prepare a schedule to support your answer 21 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?". Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your answer. Net Income Continue Eliminate Increase (Decrease) Value Value Value Variable costs 157.5 17:8 167:10 1711 17-15 Sales Data Review View HelpDYMO Label QuickBooks File Home Insert C28 X 14 Page Layout Formulas for Value V 26 Value Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your answer. Net income Continue Eliminate Increase (Decrease) Sales Value Value Value Variable costs Cost of goods sold Value Value Operating expenses Value Value Value Total variable Contribution margin Fixed costs Cost of goods sold Value Value Value Operating expenses Value Value Value Total fixed Net income (loss) 1 Response: 57:5 E7-8 E7-10E7.11 57-15 Response: FR 1. Assume that variable cost of goods sold for the Percy Division changed to $68,000 and fixed operating expenses changed to $27,500. There was no change to variable operating costs. How would these changes impact your answer? 1675 E7- 8E7-10 | 671 E7-15 * Type here to search

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