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PLEASE ANSWER requirements: The manager of the division is surprised that the T205 product line is not profitable. The division accountant estimates that dropping the
PLEASE ANSWER
requirements:
The manager of the division is surprised that the T205 product line is not profitable. The division accountant estimates that dropping the T205 product line will decrease fixed cost of goods sold by $78,000 and decrease fixed selling and administrative expenses by$14,000. | ||
a. | Prepare a differential analysis to show whether Division B should drop the T205 product line. | |
b. | What is your recommendation to the manager of Division B? |
please help me and answer both a and b
2. The division manager of Division B received the following operating income data for the past year: Division B of Deisel, Inc. Income Statement For the Year Ended December 31, 2024 Product Line T205 B179 Total Net Sales Revenue $ 270,000 $ 390,000 $ 660,000 Cost of Goods Sold: Variable 35,000 40,000 75,000 Fixed 250,000 63,000 313,000 Total Cost of Goods Sold 285,000 103,000 388,000 Gross Profit (15,000) 287,000 272,000 Selling and Administrative Expenses: Variable 61,000 143,000 82,000 21,000 Fixed 46,000 67,000 107,000 Total Selling and Administrative Expenses 103,000 210,000 $ (122,000) $ 184,000 $ 62,000 Operating Income (Loss)Step by Step Solution
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