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given WoolCorp Condensed Income Statement For the Year Ended December 31, 2048 1 Raw Wool Wool Yarn Rug Yarn Total Company 2 Sales $200,000.00 $155,000.00
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WoolCorp Condensed Income Statement For the Year Ended December 31, 2048 1 Raw Wool Wool Yarn Rug Yarn Total Company 2 Sales $200,000.00 $155,000.00 $197,000.00 $552,000.00 3 Cost of goods sold: 4 Variable costs $48,000.00 $18,600.00 $37,200.00 $103,800.00 5 Fixed costs 32,000.00 12,400.00 24,780.00 69,180.00 6 Total cost of goods sold $80,000.00 $31,000.00 $61,980.00 $172,980.00 7 Gross profit $120,000.00 $124,000.00 $135,020.00 $379,020.00 8 Operating expenses: 9 Variable expenses $5,000.00 $7,750.00 $53,080.00 $65,830.00 10 Fixed expenses 89,000.00 77,000.00 106,200.00 272,200.00 11 Total operating expenses $94,000.00 $84,750.00 $159,280.00 $338,030.00 12 Income (Loss) from operations $26,000.00 $39,250.00 $(24,260.00) $40,990.00 Complete the following table using the data in the preceding income statement to compare the effects of dropping the rug yarn line of products. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If an amount is zero, enter O. Differential Analysis Score: 20/46 Continue Rug Yarn (Alternative 1) or Discontinue Rug Yarn (Alternative 2) December 31, 20Y8 Continue Rug Yarn (Alternative 1) 1 Discontinue Rug Yarn (Alternative 2) Differential Effect on Income (Alternative 2) 2 Revenues $197,000.00 $0.00 $(197,000.00) 3 Costs: 4 Variable $90,280.00 $0.00 $(90,280.00) 5 Fixed 130,980.00 0.00 6 Income (loss) $24,260.00Step by Step Solution
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