ent FULL SCREEN PRINTER VERSIONBACK NEXT Exercise 21-15 Veronica Mars, a recent
ID: 2540184 • Letter: E
Question
ent FULL SCREEN PRINTER VERSIONBACK NEXT Exercise 21-15 Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn'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 $26,100. The Other Percy Five Divisions Division Total Sales Cost of goods sold Gross profit Operating expenses Net income $1,664,000 $100,300 $1,764,300 977,900 76,300 1,054,200 710,100 578,100 $158,100$ (26,100$132,000 686,100 24,000 528,000 50,100 In the Percy Division, cost of goods sold is $59,300 variable and $17,000 fixed, and operating expenses are $31,600 variable and $18,500 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Veronica right about eliminatinge 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 (Decrease) Continue Eliminate Sales Variable costs Cost of goods sold Operating expenses MAExplanation / Answer
Answer
Continue
Eliminate
Net Income Increase (Decrease)
Sales
100300
0
-100300
variable costs:
0
Cost of Goods Sold
59300
0
59300
Operating expenses
31600
0
31600
Total Variable
90900
0
90900
Contribution margin
9400
0
-9400
Fixed Cost:
0
Cost of Goods SOld
17000
17000
0
Operating expenses
18500
18500
0
Total fixed
35500
35500
0
Net Income (Loss)
-26100
-35500
-9400
Continue
Eliminate
Net Income Increase (Decrease)
Sales
100300
0
-100300
variable costs:
0
Cost of Goods Sold
59300
0
59300
Operating expenses
31600
0
31600
Total Variable
90900
0
90900
Contribution margin
9400
0
-9400
Fixed Cost:
0
Cost of Goods SOld
17000
17000
0
Operating expenses
18500
18500
0
Total fixed
35500
35500
0
Net Income (Loss)
-26100
-35500
-9400
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.