Product Alpha has revenue of $101,590, variable cost of goods sold of $51,430, variable selling expenses of $21,010, and fixed costs of $36,680, creating a loss from operations of $7,530. Required: 1. Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. 2. Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2). Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. Differential Analysis Continue (Alternative 1) or Discontinue (Alternative 2) Product Alpha December 10 1 Continue Product Alpha Discontinue Product Alpha Differential Effect on Income 2 (Alternative 1) (Alternative 2) (Alternative 2) 3 4 Costs: 5 6 7 8 9 Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2). The company is indifferent since the result is the same regardless of which alternative is chosen. Continued Discontinued
Product Alpha has revenue of $101,590, variable cost of goods sold of $51,430, variable selling expenses of $21,010, and fixed costs of $36,680, creating a loss from operations of $7,530. Required: 1. Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. 2. Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2). Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. Differential Analysis Continue (Alternative 1) or Discontinue (Alternative 2) Product Alpha December 10 1 Continue Product Alpha Discontinue Product Alpha Differential Effect on Income 2 (Alternative 1) (Alternative 2) (Alternative 2) 3 4 Costs: 5 6 7 8 9 Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2). The company is indifferent since the result is the same regardless of which alternative is chosen. Continued Discontinued
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
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Question
Product Alpha has revenue of $101,590, variable cost of goods sold of $51,430, variable selling expenses of $21,010, and fixed costs of $36,680, creating a loss from operations of $7,530.
| Required: | |
| 1. | Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. |
| 2. | Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2). |
Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
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Differential Analysis
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Continue (Alternative 1) or Discontinue (Alternative 2) Product Alpha
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December 10
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Continue Product Alpha
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Discontinue Product Alpha
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Differential Effect on Income
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2
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(Alternative 2)
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(Alternative 2)
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Costs:
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5
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6
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7
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8
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9
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Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2).
The company is indifferent since the result is the same regardless of which alternative is chosen.
Continued
Discontinued
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