I posted this question and these are the answers that they gave me (in red). But the red means that those answers are wrong. Please help!
Mastery Problem: Differential Analysis and Product Pricing WoolCorp ! Continue/Discontinue ! Final Questions Continue/Discontinue WoolCorp Shaded cells have feedback. X WoolCorp buys sheep's wool from farmers. The company began operations in January of this year, and is making decisions on product offerings, pricing, and vendors. The company is also examining its method of assigning overhead to products. You've just been hired as a production manager at WoolCorp. Currently WoolCorp makes three products: (1) raw, clean wool to be used as stuffing or insulation; (2) wool yarn for use in the textile industry, and (3) extra-thick yarn for use in rugs. Upper management would like your recommendations regarding a production decision regarding their current and proposed product lines. Continue/Discontinue Shaded cells have feedback. 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. Continue/Discontinue Shaded cells have feedback WoolCorp Condensed Income Statement For the Year Ended December 31, 20Y8 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 Continue/Discontinue Shaded cells have feedback. X Complete the following table using the data in the preceding income statement to compare the effects of dropping the rug yam line of products. For those boxes in which you must enter subtracted or negative numbers use minus sign. If an amount is zero, enter "0". Differential Analysis Score: 13/46 Continue Rug Yarn (Alternative 1) or Discontinue Rug Yarn (Alternative 2) December 31, 20Y8 Discontinue Differential Effect Continue Rug Yarn (Alternative 1) Rug Yarn (Alternative 2) on Income (Alternative 2) $(197,000.00) 2 Revenues $552,000.00 $355,000.00 3 Costs: Variable $169,630.00 $79,350.00 $90,280.00 Fixed 341,380.00 341,380.00 0.00 6 Income (Loss) $40,990.00 $(65,730.00) $(106,720.00)
