E6-10 - E6-10 Maggie Sharrer Income Statement (continued) 5...

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Unformatted text preview: E6-10 Maggie Sharrer Income Statement (continued) 5 Other Erie Divisions Division Total $1,664,200 $100,000 $1,764,200 $60,000 $16,500 $76,500 $23,500 $25,000 $23,000 $527,940 $157,740 $48,000 ($24,500) $575,940 $133,240 Sales COGS Variable cost Fixed cost Total COGS Gross Profit Op expenses Variable cost Fixed cost Total Op Expense Net income $978,520 $685,680 $1,055,020 $709,180 $0 Maggie Sharrer Income Statement (discontinued) Non Eliminated fixed cost (Erie Division) $0 $0 $16,500 $16,500 ($16,500) $0 $23,000 $527,940 $157,740 $23,000 ($39,500) $550,940 $118,240 Sales COGS Variable cost Fixed cost Total COGS Gross Profit Op expenses Variable cost Fixed cost Total Op Expense Net income 5 Other Divisions $1,664,200 Total $1,664,200 $978,520 $685,680 $995,020 $669,180 $0 Incremental analysis Total profit if Erie division continued Total profit if Erie division discontinued Decrease in profit $133,240 $118,240 $15,000 The overall profit decreases by $15,000 if the Erie Division is discontinued. It is advisable to continue the division. ...
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