Current Attempt in Progress

Marigold'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 $$79,400,$ variable costs of $$45,900,$ and total fixed costs of $$47,600.$ Of the total fixed costs, $$31,500$ will continue whether the division is dropped or not; the remaining $$16,100$ is for supervisor salaries, positions that would be eliminated.

How much of the Wild division's fixed costs are direct versus allocated?

Direct

Allocated

Fixed costs

$

$

Should Marigold close the division?

Segment margin $

Marigold

close the Wild division.