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Top managers of Sunset Video are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the following
Top managers of Sunset Video 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.) Total fixed costs will not change if the company stops selling DVDs. Read the requirements. Requirement 1. Prepare a differential analysis to show whether Sunset Video should drop the DVD product line. Begin by preparing a differential analysis to show whether Sunset Video should drop the DVDs product line. (Enter decreases to profits with a parentheses or minus sign.) Expected decrease in revenues-Dropping DVDs Expected decrease in costs-Dropping DVDs Expected in operating income i Data Table - X Sunset Video Income Statement For the Year Ended December 31, 2024 Total Blu-ray Discs DVD Discs Net Sales Revenue 431,000 $ 303,000 $ 128,000 Variable Costs 251,000 159,000 92,000 Contribution Margin 180,000 144,000 36,000 Fixed Costs: Manufacturing 128,000 72,000 56,000 Selling and Administrative 70,000 55,000 15,000 Total Fixed Costs 198,000 127,000 71,000 17,000 $ (18,000) $ Operating Income (Loss) (35,000) Choose from any list or enter any number in the in
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