Wildhorse Equipment sells equipment to sports enthusiasts. Doug Wildhorse, the company's president, just received the following income statement reporting the results of the past year. Baseball Soccer Basketball Total Sales revenue $1,350,000 $3,870,000 $2,541,000 $7,761,000 Variable cost of goods sold 912,000 2,515,500 2,049,600 5,477,100 Fixed cost of goods sold 122,900 200,700 176,700 500,300 Gross profit 315,100 1,153,800 314,700 1,783,600 Variable operating expenses 182,400 619.200 254,100 1,055,700 Fixed operating expenses 84,600 90,300 78,300 253,200 Common fixed costs 64,500 138,000 104,100 306,600 Operating income ($16,400) $306,300 ($121,800) $168,100 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. (b) Should Doug close the baseball and basketball divisions? Doug Doug eTextbook and Media Save for Later consider closing the baseball division. consider closing the basketball division. Attempts: 0 of 3 used Submit Answer 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 eTextbook and Media change the decision.