Please do not give solution in image format thanku Prepare an analysis showing the effect of discontinuing the Wise division. (Do not round intermediate calculations and roundfinal answers to 0 decimal places, e.g. 1,525.)RevenueLess variable costsLess direct fixed costsLess allocated fixed costsNet incomeBud$$ErI$Total Blossom, Inc. has three divisions: Bud, Wise, and Er. The results of operations for May, 2022 are presented below.Units soldRevenueLess variable costsLess direct fixed costsLess allocated fixed costsNet incomeBud5,700$133,00060,80026,60011,400$34,200Wise9,500$95,00049,40036,10019,000$(9,500)Er3,800$76,000 $304,00030,400140,60085,50038,000$39.90022,800Total7,600$15,20019,000All of the allocated costs will continue even if a division is discontinued. Blossom allocates indirect fixed costs based on the number ofunits to be sold. Since the Wise division has a net loss, Blossom is concerned that it should be discontinued. Blossom thinks that if thedivision is closed, that sales at the Bud division will increase by 12% while sales at the Er division will stay the same.

Bud (6384) Er (3800) Total Revenue $148,960 $76,000 $224,960 Less : Variable cost…

Answered: xed costs d fixed costs 26,600 11,400…

xed costs d fixed costs 26,600 11,400 $34,200 36,100 19,000 $(9,500) 22,800 7,600 $15,200 85,500 38,000 $39.900 cated costs will continue even if a division is discontinued. Blossom allocates

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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