CH25CT N2

CH25CTN5

Discontinue a Segment Product Omega has revenue of $2,375,000, variable cost of goods sold of $1,900,000, variable selling expenses of $250,000, and fixed costs of $300,000, creating an operating loss of $(75,000). a. Prepare a differential analysis as of January 15 to deternine if Product Omega 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. T Check My won For continue and discontinue altematives subtract the costs from the revenue. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from aiternative 2. b. Determine if Product Omega should be continued (Alternative 1) or discontinued (Alternative 2). Process or Sell Product Tango is produced for $24 per gallon. Product Tango can be sold without additional processing for $40 per gallon, or processed further into Product Zulu at an additional cost of $9 per gallon. Product Zulu can be sold for $55 per gallon. a. Prepare a differential analysis dated October 3 en whether to sell Product Tango (Alternative 1) or process further into Product Zulu (Aiternative 2). If required, use a minus sign to indicate a loss. Fentoce FCein won For both products, subtrect the unit costs frem the price. Determice the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2. b. should Preduct Tango be sold (Aiternatiye 1) or processed further into Product zulu (Aiternative 2)