1. Bullwinkle Company owns equipment with a cost of $367,300 and accumulated depreciation of $52,100 that can be sold for $277,800, less a 3% sales commission. Alternatively, Bullwinkle Company can lease the equipment for three years for a total of $287,900, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Bullwinkle Company on the equipment would total $15,800 over the three year lease.

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a. Prepare a differential analysis on August 7 as to whether Bullwinkle Company should lease (Alternative 1) or sell (Alternative 2) the equipment. If required, use a minus sign to indicate a loss.

Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) August 7

	Lease Equipment (Alternative 1)	Sell Equipment (Alternative 2)	Differential Effects (Alternative 2)
Revenues	$fill in the blank 8a270e067fecf96_1	$fill in the blank 8a270e067fecf96_2	$fill in the blank 8a270e067fecf96_3
Costs	fill in the blank 8a270e067fecf96_4	fill in the blank 8a270e067fecf96_5	fill in the blank 8a270e067fecf96_6
Profit (Loss)	$fill in the blank 8a270e067fecf96_7	$fill in the blank 8a270e067fecf96_8	$fill in the blank 8a270e067fecf96_9

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b. Should Bullwinkle Company lease (Alternative 1) or sell (Alternative 2) the equipment?

2.

Product Tango has revenue of $195,000, variable cost of goods sold of $115,100, variable selling expenses of $32,100, and fixed costs of $61,000, creating an operating loss of $(13,200).

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a. Prepare a differential analysis as of February 13 to determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.

Differential Analysis Continue Product Tango (Alt. 1) or Discontinue Product Tango (Alt. 2) February 13

	Continue Product Tango (Alternative 1)	Discontinue Product Tango (Alternative 2)	Differential Effects (Alternative 2)
Revenues	$fill in the blank c16a3c035f90faa_1	$fill in the blank c16a3c035f90faa_2	$fill in the blank c16a3c035f90faa_3
Costs:
Variable cost of goods sold	fill in the blank c16a3c035f90faa_4	fill in the blank c16a3c035f90faa_5	fill in the blank c16a3c035f90faa_6
Variable selling and admin. expenses	fill in the blank c16a3c035f90faa_7	fill in the blank c16a3c035f90faa_8	fill in the blank c16a3c035f90faa_9
Fixed costs	fill in the blank c16a3c035f90faa_10	fill in the blank c16a3c035f90faa_11	fill in the blank c16a3c035f90faa_12
Profit (Loss)	$fill in the blank c16a3c035f90faa_13	$fill in the blank c16a3c035f90faa_14	$fill in the blank c16a3c035f90faa_15

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

ContinuedDiscontinued