1. Product T has revenue of $194,400, variable cost of goods sold of $116,300, variable selling expenses of $33,000, and fixed costs of $60,500, creating a loss from operations of $15,400.

Prepare a differential analysis as of May 9, to determine whether Product T should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

2. Make or Buy

A restaurant bakes its own bread for a cost of $144 per unit (100 loaves), including fixed costs of $35 per unit. A proposal is offered to purchase bread from an outside source for $96 per unit, plus $8 per unit for delivery.

Prepare a differential analysis dated July 7 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis Continue Product T (Alt. 1) or Discontinue Product T (Alt. 2) May 9 Differential Effect Continue Product Discontinue Product D on Income T(Alternative 1) T(Alternative 2) (Alternative 2) Revenues Costs: Variable cost of goods sold Variable selling expenses Fixed costs Income (Loss) Determine if Product T should be continued (Alternative 1) or discontinued (Alternative 2). Differential Analysis Make Bread (Alt. 1) or Buy Bread (Alt. 2) July 7 Differential Effect Make Bread Buy Bread on Income (Alternative 1) (Alternative 2) (Alternative 2) $0 $0 $0 Sales price Unit Costs: Purchase price Delivery Variable costs Fixed factory overhead Income (Loss) Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread