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Part 1 of 2 Points: 0.57 of 1 Top managers of Movies and More are alarmed by their operating losses. They are considering dropping the
Part 1 of 2 Points: 0.57 of 1 Top managers of Movies and More are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the following analysis to help make this decision: (Click the icon to view the analysis.) Assume that Movies and More can avoid $39,000 of fixed costs by dropping the DVD product line (these costs are direct fixed costs of the DVD product line). Prepare a differential analysis to show whether Movies and More should stop selling DVDs. (Enter decreases to revenues with a parentheses or minus sign.) DO. Expected decrease in revenues Expected decrease in costs: Variable costs Fixed costs Expected decrease in total costs Expected in operating income Data table I VI LIIC Ical LITUTUCUCINCI JI, ZUIO Blu-ray Discs Total DVD Discs Net Sales Revenue $ 429,000 $ 252,000 301,000 $ 152,000 128,000 100,000 Variable Costs Contribution Margin 177,000 149,000 28,000 Fixed Costs: Manufacturing 129,000 74,000 55,000 Selling and Administrative 63,000 53,000 10,000 Total Fixed Expenses 192,000 127,000 65,000 Operating Income (Loss) $ (15,000) $ 22,000 $ (37,000) Print Done
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