Product AG52 has revenues of $195,200, variable cost of goods sold of $113,000, variable selling expenses of $33,500, and fixed costs of $60,900, creating a loss from operations of $12,200. 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 1c1f21f34fb4f8c_1 $fill in the blank 1c1f21f34fb4f8c_2 $fill in the blank 1c1f21f34fb4f8c_3 Costs: Variable cost of goods sold fill in the blank 1c1f21f34fb4f8c_4 fill in the blank 1c1f21f34fb4f8c_5 fill in the blank 1c1f21f34fb4f8c_6 Variable selling expenses fill in the blank 1c1f21f34fb4f8c_7 fill in the blank 1c1f21f34fb4f8c_8 fill in the blank 1c1f21f34fb4f8c_9 Fixed costs fill in the blank 1c1f21f34fb4f8c_10 fill in the blank 1c1f21f34fb4f8c_11 fill in the blank 1c1f21f34fb4f8c_12 Income (Loss) $fill in the blank 1c1f21f34fb4f8c_13 $fill in the blank 1c1f21f34fb4f8c_14 $fill in the blank 1c1f21f34fb4f8c_15 b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Product AG52 has revenues of $195,200, variable cost of goods sold of $113,000, variable selling expenses of $33,500, and fixed costs of $60,900, creating a loss from operations of $12,200.
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 1c1f21f34fb4f8c_1 | $fill in the blank 1c1f21f34fb4f8c_2 | $fill in the blank 1c1f21f34fb4f8c_3 |
| Costs: | |||
| Variable cost of goods sold | fill in the blank 1c1f21f34fb4f8c_4 | fill in the blank 1c1f21f34fb4f8c_5 | fill in the blank 1c1f21f34fb4f8c_6 |
| Variable selling expenses | fill in the blank 1c1f21f34fb4f8c_7 | fill in the blank 1c1f21f34fb4f8c_8 | fill in the blank 1c1f21f34fb4f8c_9 |
| Fixed costs | fill in the blank 1c1f21f34fb4f8c_10 | fill in the blank 1c1f21f34fb4f8c_11 | fill in the blank 1c1f21f34fb4f8c_12 |
| Income (Loss) | $fill in the blank 1c1f21f34fb4f8c_13 | $fill in the blank 1c1f21f34fb4f8c_14 | $fill in the blank 1c1f21f34fb4f8c_15 |
b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).
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