Product AG52 has revenues of $195,200, variable cost of goods sold of $113,000, variable selling expenses of $33,500, and fixed costs of $60,900, creating a loss from operations of $12,200.
a. Prepare a differential analysis as of October 7 to determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter “0”. Use a minus sign to indicate a loss.
| Differential Analysis | |||
| Continue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2) | |||
| October 7 | |||
| Continue Product AG52 (Alternative 1) | Discontinue Product AG52 (Alternative 2) | Differential Effect on Income (Alternative 2) | |
| Revenues | $fill in the blank 1c1f21f34fb4f8c_1 | $fill in the blank 1c1f21f34fb4f8c_2 | $fill in the blank 1c1f21f34fb4f8c_3 |
| Costs: | |||
| Variable cost of goods sold | fill in the blank 1c1f21f34fb4f8c_4 | fill in the blank 1c1f21f34fb4f8c_5 | fill in the blank 1c1f21f34fb4f8c_6 |
| Variable selling expenses | fill in the blank 1c1f21f34fb4f8c_7 | fill in the blank 1c1f21f34fb4f8c_8 | fill in the blank 1c1f21f34fb4f8c_9 |
| Fixed costs | fill in the blank 1c1f21f34fb4f8c_10 | fill in the blank 1c1f21f34fb4f8c_11 | fill in the blank 1c1f21f34fb4f8c_12 |
| Income (Loss) | $fill in the blank 1c1f21f34fb4f8c_13 | $fill in the blank 1c1f21f34fb4f8c_14 | $fill in the blank 1c1f21f34fb4f8c_15 |
b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).
Discontinue a Segment
Product AG52 has revenues of $195,100, variable cost of goods sold of $114,900, variable selling expenses of $31,700, and fixed costs of $58,700, creating a loss from operations of $10,200.
a. Prepare a differential analysis as of October 7 to determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter “0”. Use a minus sign to indicate a loss.
| Differential Analysis | |||
| Continue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2) | |||
| October 7 | |||
| Continue Product AG52 (Alternative 1) | Discontinue Product AG52 (Alternative 2) | Differential Effect on Income (Alternative 2) | |
| Revenues | $fill in the blank b5e04dfb8f9bf83_1 | $fill in the blank b5e04dfb8f9bf83_2 | $fill in the blank b5e04dfb8f9bf83_3 |
| Costs: | |||
| Variable cost of goods sold | fill in the blank b5e04dfb8f9bf83_4 | fill in the blank b5e04dfb8f9bf83_5 | fill in the blank b5e04dfb8f9bf83_6 |
| Variable selling expenses | fill in the blank b5e04dfb8f9bf83_7 | fill in the blank b5e04dfb8f9bf83_8 | fill in the blank b5e04dfb8f9bf83_9 |
| Fixed costs | fill in the blank b5e04dfb8f9bf83_10 | fill in the blank b5e04dfb8f9bf83_11 | fill in the blank b5e04dfb8f9bf83_12 |
| Income (Loss) | $fill in the blank b5e04dfb8f9bf83_13 | $fill in the blank b5e04dfb8f9bf83_14 | $fill in the blank b5e04dfb8f9bf83_15 |
b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).
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