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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.) Expected decrease in revenues-Dropping DVDs Expected decrease in costs- Dropping DVDs iData Table in operating income Sunset Video Income Statement For the Year Ended December 31, 2018 Blu-ray Discs S 428,000$301,00D$ 127,000 DVD Total Discs Net Sales Revenue Variable Costs Contribution Margin Fixed Costs: 248,000 149,000 99,000 180,000 152,000 28,000 127,000 74,000 201,000 73,000 57,000 130,000 54,000 17,000 71,000 22,000 $(43,000) Manufacturing Selling and Administrative Total Fixed Expenses $ (21,000) S Operating Income (Loss) Print Done

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