Prepare an analysis showing the effect of discontinuing the Wise division. (Do not round intermediate calculations and round final answers to decimal places, eg. 1,525.) Bud Er Total Revenue $ 227360 $ 116000 343360 Less variable costs 103936 Less direct fixed costs Less allocated fixed costs Net income $ Wildhorse, Inc. has three divisions: Bud, Wise, and Er. The results of operations for May, 2022 are presented below. Bud Wise Er Total Units sold 8.700 14,500 5,800 29,000 Revenue $203,000 $ 145,000 $116,000 $ 464,000 Less variable costs 92.800 75,400 46,400 214,600 Less direct fixed costs 40,600 55,100 34.800 130,500 Less allocated fixed costs 17,400 29,000 11,600 58,000 Net income $ 52,200 $( 14 500) $ 23,200 $ 60,900 All of the allocated costs will continue even if a division is discontinued. Wildhorse allocates indirect fixed costs based on the number of units to be sold. Since the Wise division has a net loss, Wildhorse is concerned that it should be discontinued. Wildhorse thinks that if the division is closed that sales at the Bud division will increase by 12% while sales at the Er division will stay the same. www.youtube.com fal Sheridan Garden recently opened her own basketweaving studio, She sells finished baskets In addition to selling the raw materials needed by customers to weave baskets of their own. Unfortunately, owing to space limitations, Sheridan is unable to carry all the varieties of kits originally assembled and must choose between two basic packages. The Basic Kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basie package costs Sheridan $ 12 and sells for $ 27. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the reeds and weave the basket. Sheridan produces the Stage 2 Kit by using the materials included in the Basic Kit Because she is more efficient at cutting and dying reeds than her average customer, Sheridan is able to produce two Stage 2 kits in one hour from one Basic Kit (She values her time at $ 22 per hour) The Stage 2 kit sells for $35. Sell (Basic Kit) Process Further (Stage 2 Kit) Net Income Increase (Decrease) Sales per unit $ 27 35 8 Costs per unit Direct materials $ 12 1 12 Direct labor 15 Total $ 100! 12 $ Net income per unit 15 $