Discontinue a Segment Product AG52 has revenues of $194,700, variable cost of goods sold of $115,500, variable selling expenses of $31,100, and fixed costs of $59,300, creating a loss from operations of $11,200. 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 14650f02dfdc057_1 $fill in the blank 14650f02dfdc057_2 $fill in the blank 14650f02dfdc057_3 Costs: Variable cost of goods sold fill in the blank 14650f02dfdc057_4 fill in the blank 14650f02dfdc057_5 fill in the blank 14650f02dfdc057_6 Variable selling expenses fill in the blank 14650f02dfdc057_7 fill in the blank 14650f02dfdc057_8 fill in the blank 14650f02dfdc057_9 Fixed costs fill in the blank 14650f02dfdc057_10 fill in the blank 14650f02dfdc057_11 fill in the blank 14650f02dfdc057_12 Income (Loss) $fill in the blank 14650f02dfdc057_13 $fill in the blank 14650f02dfdc057_14 $fill in the blank 14650f02dfdc057_15 b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Discontinue a Segment

Product AG52 has revenues of $194,700, variable cost of goods sold of $115,500, variable selling expenses of $31,100, and fixed costs of $59,300, creating a loss from operations of $11,200.

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 14650f02dfdc057_1	$fill in the blank 14650f02dfdc057_2	$fill in the blank 14650f02dfdc057_3
Costs:
Variable cost of goods sold	fill in the blank 14650f02dfdc057_4	fill in the blank 14650f02dfdc057_5	fill in the blank 14650f02dfdc057_6
Variable selling expenses	fill in the blank 14650f02dfdc057_7	fill in the blank 14650f02dfdc057_8	fill in the blank 14650f02dfdc057_9
Fixed costs	fill in the blank 14650f02dfdc057_10	fill in the blank 14650f02dfdc057_11	fill in the blank 14650f02dfdc057_12
Income (Loss)	$fill in the blank 14650f02dfdc057_13	$fill in the blank 14650f02dfdc057_14	$fill in the blank 14650f02dfdc057_15

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

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