ice Gradebook ORION Milwaukee, Inc. has three divisions: Bud,...
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ice Gradebook ORION Milwaukee, Inc. has three divisions: Bud, Wise, and Er. The results of May, 2016 are presented below Wise Bud 3,000 5,000 Total Units sold Revenue Less variable costs Less direct fixed costs Less allocated fixed costs Net income 2,000 10,000 $70,000 $50,000 $40,000 $160,000 32,000 26,000 16,000 74,000 14,000 19,000 12,000 5,000 6,000 10,000 4,000 20,000 18,000 (5.000) $8,000 $ 21,000 costs will continue even if a division is discontinued. Milwaukee allocates indirect fixed costs based on the number of units to be sold Since the Wise drvision hes a net loss, Mlwaskee feels that it should be discontinued. Midwaukee feels if the division is closed, t hat sales at the Bud dis on wl increase by 12%, and ehat sales at te tr dwuon wd stay the same. (a) Prepare an analysis showing the efflect of discontiuing the Wise division Bad Revenue Less variable costs Less direct fixed costs Less allocated fixed costs Net income re to search BANG &OLUFS
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