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please dont crop out answers Top managers of Sunset Video are atarmed by their operating losses. They are considering dropping the DVD product line. Company
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Top managers of Sunset Video are atarmed 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) Total foxed costs will not change if the company stops selling DVDs. Read the requirements a Requirement 1. Prepare a differential analysis to show whether Sunset Video should drop the DVD product line Begin by preparing a diferential analysis to show whether Sunset Video should drop the DVDs product line (Enter decreases to profits with a parentheses or minus sign) Expected decrease in revenues-- Dropping DVDs Expected decrease in costs -- Dropping DVDs Expected decrease in operating income ho - - Top managers of Sunset Vide the following analysis to help (Click the icon to view the Total fixed costs will not chan Data table Read the requirements Sunset Video wit Requirement 1. Prepare a di Begin by preparing a different sign.) Expected decrease in reveny Expected decrease in costs Expected decrease in op Income Statement For the Year Ended December 31, 2018 Total Blu-ray Discs DVD Discs Net Sales Revenue 427,000 $ 307,000 $ 120,000 Variable Costs 243,000 152,000 91,000 Contribution Margin 184.000 155,000 29,000 Fixed Costs Manufacturing 132,000 75,000 57 000 Selling and Administrative 59,000 49,000 10,000 Total Fixed Expenses 191,000 124.000 67,000 S Operating Income (Loss) (7,000) $ 31,000 $ (38,000) - X Requirements 1. Prepare a differential analysis to show whether Sunset Video should drop the DVD product line 2. Will dropping DVDs add $38,000 to operating income? Explain Cian Step by Step Solution
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