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Sheridan, Inc. has three divisions: Bud, Wise, and Er. The results of operations for May,...

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Accounting

Sheridan, Inc. has three divisions: Bud, Wise, and Er. The results of operations for May, 2027 are presented below.
All of the allocated costs will continue even if a division is discontinued. Sheridan allocates indirect fixed costs based on the number of units to be sold. Since the Wise division has a net loss, Sheridan is concerned that it should be discontinued. Sheridan thinks that if the division is closed, that sales at the Bud division will increase by \(12\%\) while sales at the Er division will stay the same.
(a)
Prepare an analysis showing the effect of discontinuing the Wise division. (Do not round intermediate calculations and round final answers to 0 decimal places, e.g.1,525.)
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