(Solution) - Mary Myers a recent graduate of Rolling s accounting program e -(2025 Original AI-Free Solution)

Paper Details

Mary Myers, a recent graduate of Rolling?s accounting program, evaluated the operating performance of Shaw Company?s six divisions. Mary made the following presentation to Shaw?s Board of Directors and suggested the Erie Division be eliminated. ?If the Erie Division is eliminated,? she said, ?our total profits would increase by $24,500.?

In the Erie Division, cost of goods sold is $60,000 variable and $16,500 fixed, and operating expenses are $25,000 variable and $23,000 fixed. None of the Erie Division?s fixed costs will be eliminated if the division is discontinued.

Instructions
Is Mary right about eliminating the Erie Division? Prepare a schedule to support youranswer.