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Top managers of Movies are Best are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the
Top managers of Movies are Best 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 are best can avold $39,000 of feed costs by dropping the DVD product in these costs are direct fixed costs of the DVD product line) revents with a parentheses or minus sign) Prepare a diferential analysis to show whether Movies are Best should stop seling DVDs (Enter decreases to Expected decrease in revenues Expected decrease in costs Variable costs Fred costs Expected decrease in total costs Expected in operating Income Movies are Best Income Statement For the Year Ended December 31, 2024 Total Blu-ray Discs DVD Discs Net Sales Revenue $ 427,000 $ 306,000 $ 153,000 121,000 98,000 Variable Costs 251,000 Contribution Margin 176,000 153,000 23,000 Fixed Costs: Manufacturing 69,000 119,000 64,000 50,000 10,000 Selling and Administrative 54,000 Total Fixed Costs 183,000 123,000 60,000 Operating Income (Loss) $ (7,000) $ 30,000 $ (37,000)
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