Question 4 (Eliminate Unprofitable Segment) Anheiser has three divisions: Bud, Wise, and ER. The results of May, 2020 are presented below: Units sold Revenue Less variable costs Less direct fixed costs Less allocated fixed costs Net income Bud 5,000 Wise ER 7,000 4,000 Total 16,000 $80,000 $ 60,000 $30,000 $170,000 37,000 42,000 14,000 93,000 15,000 25,000 13,000 53,000 3,125 4,375 2,500 10,000 $24.875 (S11.375) $ 500 $ 14,000 All of the allocated costs will continue even if a division is discontinued. Anheiser allocates indirect fixed costs based on the number of units to be sold. Since the Wise Division has a net loss, Anheiser feels that it should be discontinued. Anheiser feels if the division is closed, that sales at the Bud Division will increase by 30%, and that sales at the ER Division will stay the same. Prepare an analysis showing the effect of discontinuing the Wise Division. [5 marks]