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Discontinue a Segment Product Omega has revenue of $ 1 9 5 , 0 0 0 , variable cost of goods sold of $ 1

Discontinue a Segment
Product Omega has revenue of $195,000, variable cost of goods sold of $115,400, variable selling expenses of $32,900, and fixed costs of $59,900, creating an operating loss of $(13,200).
Question Content Area
a. Prepare a differential analysis as of January 15 to determine 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.
Differential Analysis
Continue (Alt.1) or Discontinue (Alt.2) Product Omega
January 15
Line Item Description Continue
Product Omega
(Alternative 1) Discontinue
Product Omega
(Alternative 2) Differential
Effects
(Alternative 2)
Revenues $Revenues
$Revenues
$Revenues
Costs:
Variable cost of goods sold Variable cost of goods sold
Variable cost of goods sold
Variable cost of goods sold
Variable selling and admin. expenses Variable selling and admin. expenses
Variable selling and admin. expenses
Variable selling and admin. expenses
Fixed costs Fixed costs
Fixed costs
Fixed costs
Profit (loss) $Profit (loss)
$Profit (loss)
$Profit (loss)
Question Content Area
b. Determine if Product Omega should be continued (Alternative 1) or discontinued (Alternative 2).

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