Question

Discontinue a Segment Product AG52 has revenues of \$193,000, variable cost of goods sold of \$113,700,...

Discontinue a Segment

Product AG52 has revenues of \$193,000, variable cost of goods sold of \$113,700, variable selling expenses of \$31,700, and fixed costs of \$58,200, creating a loss from operations of \$10,600.

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 1a576109103cfd7_1 \$fill in the blank 1a576109103cfd7_2 \$fill in the blank 1a576109103cfd7_3 Costs: Variable cost of goods sold fill in the blank 1a576109103cfd7_4 fill in the blank 1a576109103cfd7_5 fill in the blank 1a576109103cfd7_6 Variable selling expenses fill in the blank 1a576109103cfd7_7 fill in the blank 1a576109103cfd7_8 fill in the blank 1a576109103cfd7_9 Fixed costs fill in the blank 1a576109103cfd7_10 fill in the blank 1a576109103cfd7_11 fill in the blank 1a576109103cfd7_12 Income (Loss) \$fill in the blank 1a576109103cfd7_13 \$fill in the blank 1a576109103cfd7_14 \$fill in the blank 1a576109103cfd7_15

b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).

 a 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 0 193000 -193000 Costs: Variable cost of goods sold 0 -113700 113700 Variable selling expenses 0 -31700 31700 Fixed costs -58200 -58200 0 Income (Loss) -58200 -10600 -47600 b Product AG52 should be continued

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