1. A product called Wallaby has revenue of $1,250,000, variable costs of goods sold of $850,000, variable selling expenses of $275,000, and fixed costs of $225,000, creating an operating loss of $(100,000). Using differential analysis, the Company will determine whether product Wallaby should be continued or discontinued, assuming fixed costs are unaffected by the decision. What amount for the variable cost of goods sold should be used in analyzing the alternative to discontinue product Wallaby?

		$0
		$850,000
		This is not a choice.
		$425,000