Active Euthanasia Comm ,* Chapter 24 Homework X,.. CengageNOWV2IOnlinex Chegg St

Question

Active Euthanasia Comm ,* Chapter 24 Homework X,.. CengageNOWV2IOnlinex Chegg Study I Guided Sc × × ? ? ?v2.cengagenow.com/ilm/takeAssignment takeAssignmentManao?invoker-&takeAssignmentSessionLocator-assignment; take&inprogress-false; Chapter 24 Homework Show Me HoCakculator eBook Print Item A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: Sales Cost of goods sold Gross profit Operating expenses Loss from operations It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 20% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued a. Prepare a differential analysis dated January 5 to determine whether Fruit Cola should be continued [Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "O". Use a minus sign to Indicate a loss. 1. BE.24-02 ALGO $234,600 110,000 124,600 146,000 $(21,400) 2. BE.24-05.ALGO 3. BE.24-06.ALGO 4. EX.24-01.ALGO 5. EX.24-03.ALGO 6. EX24-06 7. EX.24 07.ALGO Differential Analysis Continue Fruit Cola (Alt. 1) or Discontinue Fruit Cola (Alt. 2) anuary 5 8. EX.24-09.ALGO 9. EX.24-11.ALGO Continue Fruit Cola (Alternative 1) Discontinue Fruit Cola ?Alternative 2) Differential Effect on Income (Alternative 2) Revenues 10. EX.24-15 ALGO Costs: Variable cost of goods sold variable operating expenses Fixed costs Income (Loss) Check My Work Previous Next Progress: 5/10 items 4:03 PM a 4/26/2018

Explanation / Answer

Variable cost: Cost of Goods sold (110,000*88%) 96800 Operating expense (146000*80%) 116800 Fixed Cost: Cost of Goods sold (110,000*12%) 13200 Operating expense (146000*20%) 29200 Total Fixed cost 42400 Differential analysis: Continue Discontinue Differential Effect on income Revenues 234600 0 -234600 Cost Variable c ost of goods sold 96800 0 96800 Variable operating expense 116800 0 116800 Fixed cost 42400 42400 0 Income/ (loss) -21400 -42400 -21000 Hence, the Division shall be be discontinued

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