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Top managers of Video Street are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the following
Top managers of Video Street are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the following analysis to help this docision: (Click the icon to viow the analysis.) Total fixed costs will not change it the company stops seling OVDs. Resd the requirements. Requirement 1. Prepare a ditterential analysis to show whether Video Street should drop the DVD product Ine. Begin by preparing a differental analysis to show whether Video Street should drop the DVDs product ine- (Enter decrenses to profits with a parentheses or minus sign.) Expocted decrease in revenues - Oropping DVDs Expected decrease in costs-Dropping DVD: Expocted in operating income Data table rofits with a parentheses or minus sign.) Requirements profits with a parentheses 1. Prepare a differential analysis to show whether Video Street should drop the DVD product line. 2. Will dropping DVDs add $28,000 to operating income? Explain
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