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Top managers of Movies and More are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the
Top managers of Movies and More 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 Movies and More can avoid $46,000 of fixed costs by dropping the DVD product line (these costs are direct fixed costs of the DVD product line). Prepare a differential analysis to show whether Movies and More should stop selling DVDs. (Enter decreases to revenues with a parentheses or minus sign.) I I Expected decrease in revenues Expected decrease in costs: Variable costs X Data table Fixed costs Expected decrease in total costs Movies and More Expected increase in operating income II Income Statement For the Year Ended December 31, 2024 Total Blu-ray Discs DVD Discs $ 428,000 $ 303,000 $ 125.000 246,000 149,000 97,000 Net Sales Revenue Variable Costs Contribution Margin 182,000 154,000 28,000 Fixed Costs: Manufacturing 123,000 71.000 69,000 53,000 54,000 18,000 Selling and Administrative 194,000 Total Fixed Costs 122,000 72.000 (12,000) $ 32,000 $ (44,000) Operating Income (Loss) Print Done
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