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Discontinue a Segment

Product A has revenue of $194,000, variable cost of goods sold of $113,600, variable selling expenses of $33,400, and fixed costs of $60,200, creating a loss from operations of $13,200.

Prepare a differential analysis as of September 12, 2014, to determine if Product A should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter zero "0".

Differential Analysis Continue Product A (Alt. 1) or Discontinue Product A (Alt. 2) September 12,2014 Continue Product A (Alternative 1) Discontinue Product A (Alternative 2) Differential Effect on Income (Alternative 2) Revenues 194000 Costs: Variable cost of goods sold -113600 Variable selling and admin. expenses 33400 Fixed costs 60200 Income (Loss) 13,200 Determine if Product A should be continued (Alternative 1) or discontinued (Alternative 2). continued |