Scheduling: Prol .. ACC-121-2018SP-Reeder-O . CengageNOW2lOnlir X + do?invoker a

Question

Scheduling: Prol .. ACC-121-2018SP-Reeder-O . CengageNOW2lOnlir X + do?invoker assignments&itakeAssignmen; assignment-take&inpr; eBook Show Me How Calculator Discontinue a Segment Product AG5 $50,000, creating a loss from operations of $32,000. a. Prepare a differential analysis as of October 7 to determine if Product AGS2 should be continued (Alternative 1) or discontinued (Alternative 2 has revenues of $748,000, variable cost of goods sold of $640,000, variable selling expenses of $90,000, and fixed costs of 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 (Alt. 1) or Discontinue (Alt. 2) Product AGS2 October 7 Continue Product AGS2 (Atternatve l) Dscontnue Product AGS2 (Atternatve 2) Oifferentil ffet on Income (Aternatve2) Revenues Costs: Variable cost of goods sold Variable selling expenses Fixed costs Income (Loss) b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2). 344 PM 4/4/2018 ??d. ??

Explanation / Answer

Differential analysis :

b)Product A52 should be continued (alternative 1).

Continue product (alternative 1) Discontinue product (alternative 2) Differential effect on income (alternative 2) Revenues 748000 0 -748000 Costs : Variable cost of goods sold -640000 0 640000 Variable selling expense -90000 0 90000 Fixed cost -50000 -50000 None Income (loss) -32000 -50000 -18000

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