Discontinue a Segment

Product A has revenue of $194,500, variable cost of goods sold of $113,900, variable selling expenses of $33,700, and fixed costs of $59,400, creating a loss from operations of $12,500.

Prepare a differential analysis as of May 9, to determine whether Product A 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.

	Continue Product A (Alternative 1)	Discontinue Product A (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$fill in the blank fd1baf033f97fc1_1	$fill in the blank fd1baf033f97fc1_2	$fill in the blank fd1baf033f97fc1_3
Costs:
Variable cost of goods sold	fill in the blank fd1baf033f97fc1_4	fill in the blank fd1baf033f97fc1_5	fill in the blank fd1baf033f97fc1_6
Variable selling expenses	fill in the blank fd1baf033f97fc1_7	fill in the blank fd1baf033f97fc1_8	fill in the blank fd1baf033f97fc1_9
Fixed costs	fill in the blank fd1baf033f97fc1_10	fill in the blank fd1baf033f97fc1_11	fill in the blank fd1baf033f97fc1_12
Income (Loss)	$fill in the blank fd1baf033f97fc1_13	$fill in the blank fd1baf033f97fc1_14	$fill in the blank fd1baf033f97fc1_15

Question Content Area

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