Prepare an incremental analysis for judy jean

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Problem

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 $26,340."

 

The Other
Five Divisions

Huron
Division

Total

Sales

$1,663,440

$100,220

$1,763,660

Cost of goods sold

977,660

76,950

1,054,610

Gross profit

685,780

23,270

709,050

Operating expenses

528,030

49,610

577,640

Net income

$   157,750

$ (26,340)

$   131,410

In the Huron Division, cost of goods sold is $60,600 variable and $16,350 fixed, and operating expenses are $24,700 variable and $24,910 fixed. None of the Huron Division's fixed costs will be eliminated if the division is discontinued.

Prepare an incremental analysis.

Reference no: EM131891207

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