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Continue/Discontinue For the past year, WoolCorp has experimented with its third product, extra-thick rug yarn. The company wishes to consider whether to continue or discontinue

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Continue/Discontinue For the past year, WoolCorp has experimented with its third product, extra-thick rug yarn. The company wishes to consider whether to continue or discontinue manufacturing and selling this product. You decide to prepare a differential analysis of the income related to all three products. To begin your analysis, you review the following condensed Income statement. Then scroll down to complete the differential analysis. WoolCorp Condensed Income Statement For the Year Ended December 31, 2018 Raw Wool Wool Yarn Rug Yarn Total Company Sales $200,000 $155,000 $197,000 $5$2,000 Costs of goods sold: Variable costs $(18,600) (12,400) $(48,000) (32,000) $(80,000) $120,000 $(37,150) (24,790) $(61,940) $135,060 $(31,000) $(103,750) (69,190) $(172,940) $379,060 $124,000 Fixed costs Total cost of goods sold Gross profit Operating expenses: Variable expenses Ficed expenses Total operating expenses Operating income (loss) $(5,000) (89,000) $(94,000) $(7,750) (77,000) $(65,850) $(53,100) (106,200) $(159,300) (272,200) $(84.750) $(338,050) $26,000 $39,250 $(24,240) $41.010 Complete the following table using the data in the preceding income statement to compare the effects of dropping the rug varn line of products. If required, use a minus sign to indicate a loss. Differential Analysis Continue Rug Yarn (Alternative 1) or Discontinue Rug Yarn (Alternative 2) December 31, 2018 Continue Rug Yarn (Alternative 1) Discontinue Rug Yarn (Alternative 2) Differential Effects (Alternative 2) Revenues Costs: Variable Q Fixed Profit Closs) Final Questions Answer the following question (1), then fill in table (2) 1. After reviewing your work on the Continue/Discontinue panel, should WoolCorp continue (Alternative 1) or discontinue (Alternative 2) the rug vam product line? 2. The following table shows several business decisions that might need to be made across the top row. Nong the left-hand column, there are important factors to consider Select the factors that we important to the decision, Select all that apply. If the factor is not important to any of the decisions, select "ves on the "Not Important" dropdowe, otherwise de "no". Lease or Seller Special Price Continue or Production Not Sell Process Further Order Make or Buy Discontinue Bottleneck Important mpact on regar Contribution margin per bottleneckout is more Super price is less than War warble cost per Hobson-ruman Act

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