Sunland Equipment sells equipment to sports enthusiasts. Doug Sunland, the company's president, just received the following income statement reporting the results of the past year. Baseball Soccer Basketball Total Sales revenue $1,320,000 $3,780,000 $2,484,000 $7,584,000 Variable cost of goods sold 891,000 2,457,000 2,001,600 5,349,600 Fixed cost of goods sold 120,200 196,200 172,800 489,200 Gross profit 308,800 1,126,800 309,600 1,745,200 Variable operating expenses 178,200 604,800 248,400 1,031,400 Fixed operating expenses 82,800 88,200 76,500 247,500 Common fixed costs 63,000 135,000 101,700 299,700 Operating income ($15,200) $298,800 ($117,000) $166,600 Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseball and basketball gear to concentrate solely on soccer gear. Baseball Soccer Baske $ $ V: > $ $ > Baseball Soccer Basketball Total $ $ $ $ $ $ $ $ Should Doug close the baseball and basketball divisions? Doug consider closing the baseball division. Doug consider closing the basketball division. e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c). Doug wants to change the allocation method used to allocate common fixed costs to the divisions. His plan is to allocate these costs based on sales revenue. Will this new allocation method change your decision on whether to close the baseball and basketball divisions? Changing allocation methods change the decision