Product AG52 has revenues of $748,000, variable cost of goods sold of $640,000, variable selling expenses of $90,000, and fixed costs of $50,000, creating a loss from operations of $32,000. 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. Revenues Costs: Variable cost of goods sold Variable selling expenses Fixed costs Income (Loss) Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Product AG52 October 7 Continue Product AG52 (Alternative 1) Discontinue Product AG52 (Alternative 2) Differential Effect on Income (Alternative 2) b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).

FINANCIAL ACCOUNTING
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Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Discontinue a Segment
Product AG52 has revenues of $748,000, variable cost of goods sold of $640,000, variable selling expenses of $90,000, and fixed costs of $50,000, creating a loss from
operations of $32,000.
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.
Revenues
Costs:
Variable cost of goods sold
Variable selling expenses
Fixed costs
Income (Loss)
Differential Analysis
Continue (Alt. 1) or Discontinue (Alt. 2) Product AG52
October 7
Discontinue Product AG52 (Alternative 2)
Continue Product AG52 (Alternative 1)
$
b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).
Differential Effect on Income (Alternative 2)
Transcribed Image Text:Discontinue a Segment Product AG52 has revenues of $748,000, variable cost of goods sold of $640,000, variable selling expenses of $90,000, and fixed costs of $50,000, creating a loss from operations of $32,000. 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. Revenues Costs: Variable cost of goods sold Variable selling expenses Fixed costs Income (Loss) Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Product AG52 October 7 Discontinue Product AG52 (Alternative 2) Continue Product AG52 (Alternative 1) $ b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2). Differential Effect on Income (Alternative 2)
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