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##### Judy Jean, a recent graduate of Rolling?s accounting program, evaluated the operating

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Question;Judy Jean, a recent graduate of Rolling?s accounting program, evaluated the operating performance of Artie Company?s six divisions. Judy made the following presentation to Artie?s board of directors and suggested the Huron Division be eliminated. ?If the Huron Division is eliminated,? she said, ?our total profits would increase by \$26,080.?The Other Five Divisions HuronDivision Total Sales \$1,663,170 \$100,920 \$1,764,090 Cost of goods sold 978,350 76,690 1,055,040 Gross profit 684,820 24,230 709,050 Operating expenses 527,830 50,310 578,140 Net income \$156,990 \$ (26,080) \$130,910 In the Huron Division, cost of goods sold is \$59,500 variable and \$17,190 fixed, and operating expenses are \$24,100 variable and \$26,210 fixed. None of the Huron Division?s fixed costs will be eliminated if the division is discontinued.Is Judy right about eliminating the Huron 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).)Continue Eliminate Net IncomeIncrease(Decrease) 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) \$ \$ \$

Paper#42191 | Written in 18-Jul-2015

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