Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PLEASE ANSWER THE FOLLOWING QUESTIONS: Discontinue a Segment Product AG52 has revenues of $195,500, variable cost of goods sold of $115,200, variable selling expenses of
PLEASE ANSWER THE FOLLOWING QUESTIONS:
Discontinue a Segment Product AG52 has revenues of $195,500, variable cost of goods sold of $115,200, variable selling expenses of $31,400, and fixed costs of $60,100, creating a loss from operations of $11,200. a. Prepare a differential analysis as of October 7 to determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "O". Use a minus sign to indicate a loss. Differential Analysis Continue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2) October 7 Continue Product AG52 (Alternative 1) Discontinue Product AG52 (Alternative 2) Differential Effect on Income (Alternative 2) Revenues Costs: Variable cost of goods sold Variable selling expenses Fixed costs Income (Loss) $ b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2). Continued Discontinued Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $152 per unit (100 bottles), including fixed costs of $35 per unit. A proposal is offered to purchase small bottles from an outside source for $103 per unit, plus $12 per unit for freight. a. Prepare a differential analysis dated July 31 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Use a minus sign to indicate a loss. Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) July 31 Make Bottles (Alternative 1) Buy Bottles (Alternative 2) Differential Effect on Income (Alternative 2) Sales price Unit costs: Purchase price $ $ Freight Variable costs Fixed factory overhead Income (Loss) $ b. Determine whether the comp should make (Alternative 1) or buy (Alternative 2) the bottles. Make the bottles Buy the bottles Replace Equipment A machine with a book value of $251,300 has an estimated six-year life. A proposal is offered to sell the old machine for $217,300 and replace it with a new machine at a cost of $283,400. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,800 to $40,600. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate subtracted or negative numbers or a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Direct labor (6 years) Income (Loss) b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)? continue with the old machine Replace the old machineStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started