Discontinue a SegmentProduct AG52 has revenues of $195,100, variable cost of goods sold of $114,900, variable selling expenses of $31,700, and fixed costs of $58,700, creating a loss from operations of $10,200.a. Prepare a differential analysis as of October 7 to determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Use a minus sign to indicate a loss.Differential AnalysisContinue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2)October 7 Continue Product AG52 (Alternative 1)Discontinue Product AG52 (Alternative 2)Differential Effect on Income (Alternative 2)Revenues$fill in the blank b5e04dfb8f9bf83_1$fill in the blank b5e04dfb8f9bf83_2$fill in the blank b5e04dfb8f9bf83_3Costs: Variable cost of goods soldfill in the blank b5e04dfb8f9bf83_4fill in the blank b5e04dfb8f9bf83_5fill in the blank b5e04dfb8f9bf83_6Variable selling expensesfill in the blank b5e04dfb8f9bf83_7fill in the blank b5e04dfb8f9bf83_8fill in the blank b5e04dfb8f9bf83_9Fixed costsfill in the blank b5e04dfb8f9bf83_10fill in the blank b5e04dfb8f9bf83_11fill in the blank b5e04dfb8f9bf83_12Income (Loss)$fill in the blank b5e04dfb8f9bf83_13$fill in the blank b5e04dfb8f9bf83_14$fill in the blank b5e04dfb8f9bf83_15b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).

Differential analysis is the technique or tool of the management accounting, under which it examine…

Answered: Product AG52 has revenues of $195,100,…

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 $195,100, variable cost of goods sold of $114,900, variable selling expenses of $31,700, and fixed costs of $58,700, creating a loss from operations of $10,200.

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 b5e04dfb8f9bf83_1	$fill in the blank b5e04dfb8f9bf83_2	$fill in the blank b5e04dfb8f9bf83_3
Costs:
Variable cost of goods sold	fill in the blank b5e04dfb8f9bf83_4	fill in the blank b5e04dfb8f9bf83_5	fill in the blank b5e04dfb8f9bf83_6
Variable selling expenses	fill in the blank b5e04dfb8f9bf83_7	fill in the blank b5e04dfb8f9bf83_8	fill in the blank b5e04dfb8f9bf83_9
Fixed costs	fill in the blank b5e04dfb8f9bf83_10	fill in the blank b5e04dfb8f9bf83_11	fill in the blank b5e04dfb8f9bf83_12
Income (Loss)	$fill in the blank b5e04dfb8f9bf83_13	$fill in the blank b5e04dfb8f9bf83_14	$fill in the blank b5e04dfb8f9bf83_15

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

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