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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 EE (Click the icon to view the analysis.) Assume that Movies are Best can avoid $33,000 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 are Best should stop selling DVDs. (Enter decreases to revenues with a parentheses or minus sign.) Expected decrease in reve Data Table Expected decrease in costs Variable costs Fixed costs Expected decrease in Movies are Best Income Statement For the Year Ended December 31, 2018 Expected in o DVD Blu-ray Discs $431,000 $ 306,000 $ 125,000 Total Discs Net Sales Revenue Variable Costs Contribution Margin Fixed Costs 248,000 158,000 90,000 183,000 148,000 35,000 78,000 50,000 128,000 51,000 15,000 66,000 20,000 S (31,000) Manufacturing 129,000 65,000 194,000 Selling and Administrative Total Fixed Expenses $ (11,000) $ Operating Income (Loss) Top managers of Movies are Best are alarmed by their operating losses. They are Assume that Movies are Best can avoid S33,000 of fixed costs by dropping the considering dropping the DVD product line. Company accountants have prepared DVD product line (these costs are direct fixed costs of the DVD product line the following analysis to help make this decision: (Click the icon to view the analysis.) Prepare a differential analysis to show whether Movies are Best should stop selling DVDs. (Enter decreases to revenues with a parentheses or minus sign.) Expected decrease in revenues Expected decrease in costs: Variable costs Fixed costs Expected decrease in total costs Expected in operating income
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