Discontinue a Segment

Product AG52 has revenues of $195,000, variable cost of goods sold of $113,600, variable selling expenses of $32,200, and fixed costs of $61,300, creating a loss from operations of $12,100.

a. Prepare a differential analysis as of October 7 to determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Use a minus sign to indicate a loss.

Differential Analysis
Continue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2)
October 7
	Continue Product AG52 (Alternative 1)	Discontinue Product AG52 (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$	$	$
Costs:
Variable cost of goods sold
Variable selling expenses
Fixed costs
Income (Loss)	$	$	$

b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).