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Top managers of Movie Street are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the following
Top managers of Movie Street 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 Movie Street can avoid $53,000 of fixed costs by dropping the DVD product line (these costs are direct fixed costs of the DVD produc Prepare a differential analysis to show whether Movie Street should stop selling DVDs. (Enter decreases to revenues with a parentheses or minus ... Expected decrease in revenues Expected decrease in costs: - X Data table Variable costs 10000 Fixed costs Movie Street Expected decrease in total costs Income Statement For the Year Ended December 31, 2024 Expected in operating income Net Sales Revenue $ Total Blu-ray Discs DVD Discs 436,000 $ 310,000 $ 126,000 250,000 150,000 100,000 Variable Costs Contribution Margin 186,000 160,000 26,000 Fixed Costs: Manufacturing 129,000 71,000 49,000 58,000 19.000 Selling and Administrative 68,000 197.000 Total Fixed Costs 120,000 77.000 $ Operating Income (Loss) (11,000) $ 40,000 $ (51,000) Print Done 1
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