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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

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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 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.) Decision: Requirement 2. Wal dropping DVDs add $36,000 to operating income? Explain. It is to conclude that dropping the DVD product line would add $36,000 to operating income. If the company drops the DVD product line, it incur fixed expenses allocated to the DVDs. Data table Requirements 1. Prepare a differential analysis to show whether Sunset Video should drop the DVD product line. 2. Will dropping DVDs add $36,000 to operating income? Explain

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