Discontinue a Segment Product X has revenue of $94,800, variable cost of goods sold of $61,200, variable selling expenses of $39,700, and fixed costs of $36,000, creating a loss from operations of $42,100. Prepare a differential analysis as of May 9 to determine whether to Continue Product X (Alternative 1) or Discontinue Product X (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue Product X (Alt. 1) or Discontinue Product X (Alt. 2) May 9 Contine Discontinue Differential Product X Product X Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenue $ $ $ Costs: ------------------ ------------------ ---------------- Variable cost of goods sold Variable selling expenses Fixed costs Profit (loss) $ $ $ Determine if Product X should be continued (Alternative 1) or discontinued (Alternative 2).
Discontinue a Segment Product X has revenue of $94,800, variable cost of goods sold of $61,200, variable selling expenses of $39,700, and fixed costs of $36,000, creating a loss from operations of $42,100. Prepare a differential analysis as of May 9 to determine whether to Continue Product X (Alternative 1) or Discontinue Product X (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue Product X (Alt. 1) or Discontinue Product X (Alt. 2) May 9 Contine Discontinue Differential Product X Product X Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenue $ $ $ Costs: ------------------ ------------------ ---------------- Variable cost of goods sold Variable selling expenses Fixed costs Profit (loss) $ $ $ Determine if Product X should be continued (Alternative 1) or discontinued (Alternative 2).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Discontinue a Segment
Product X has revenue of $94,800, variable cost of goods sold of $61,200, variable selling expenses of $39,700, and fixed costs of $36,000, creating a loss from operations of $42,100.
Prepare a differential analysis as of May 9 to determine whether to Continue Product X (Alternative 1) or Discontinue Product X (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Differential Analysis |
| Continue Product X (Alt. 1) or Discontinue Product X (Alt. 2) |
| May 9 |
| Contine | Discontinue | Differential | |
| Product X | Product X | Effects | |
| (Alternative 1) | (Alternative 2) | (Alternative 2) |
| Revenue | $ | $ | $ |
| Costs: | ------------------ | ------------------ | ---------------- |
| Variable cost of goods sold | |||
| Variable selling expenses | |||
| Fixed costs | |||
| $ | $ | $ |
Determine if Product X should be continued (Alternative 1) or discontinued (Alternative 2).
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