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You have 2 product divisions: Basic and Premium. You produce 400 units of Basic and 300 units of Premium. Basic uses $5 of DL per

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You have 2 product divisions: Basic and Premium. You produce 400 units of Basic and 300 units of Premium. Basic uses $5 of DL per unit, Premium uses $10 of DL per unit. Allocatable FC (i.e., total segment-specific FC) are $10,000. Question 1: Allocate the fixed costs between Basic and Premium, using DL$ as the allocation basis (cost driver). Question 2: Unit CM is $12/unit for Basic, $18/unit for Premium Compute the segment margin for Basic and Premium. Question 3: Should you discontinue Basic/Premium in the short run? Question 4: Should you discontinue Basic/Premium in the long run? PLEASE SHOW THE WORK

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