Jue's two divisions, Wild and West, have been competing since the company began 20 years ago. Managers in the Wild division generated the top sales for the first 10 years, while the West division has been the sales leader for the last 10 years. For the past 2 years, the Wild division has shown an operating loss. As a result, management is considering closing down the Wild division and operating with just one division going forward. Projected amounts for the Wild division this year include sales of $85,200, variable costs of $52,900, and total fixed costs of $43,900. Of the total fixed costs, $29,600 will continue whether the division is dropped or not; the remaining $14,300 is for supervisor salaries, positions that would be eliminated. How much of the Wild division's fixed costs are direct versus allocated? Fixed costs $ Should Blue close the division? Segment margin Blue Direct $ close the Wild division. $ Allocated

Jue's two divisions, Wild and West, have been competing since the company began 20 years ago. Managers in the Wild division generated the top sales for the first 10 years, while the West division has been the sales leader for the last 10 years. For the past 2 years, the Wild division has shown an operating loss. As a result, management is considering closing down the Wild division and operating with just one division going forward. Projected amounts for the Wild division this year include sales of $85,200, variable costs of $52,900, and total fixed costs of $43,900. Of the total fixed costs, $29,600 will continue whether the division is dropped or not; the remaining $14,300 is for supervisor salaries, positions that would be eliminated. How much of the Wild division's fixed costs are direct versus allocated? Fixed costs $ Should Blue close the division? Segment margin Blue Direct $ close the Wild division. $ Allocated

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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