Discontinue a Segment Product Tango has revenue of $194,400, variable cost of goods sold of $115,200, variable selling expenses of $31,100, and fixed costs of $59,500, creating an operating loss o $(11,400). a. Prepare a differential analysis as of February 13 to determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Product Tango (Alt. 1) or Discontinue Product Tango (Alt. 2) February 13 Continue Discontinue Differential Product Product Effects Tango (Alternative 1) (Alternative 2) Tango (Alternative 2) Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) b. Determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2).

Discontinue a Segment Product Tango has revenue of $194,400, variable cost of goods sold of $115,200, variable selling expenses of $31,100, and fixed costs of $59,500, creating an operating loss o $(11,400). a. Prepare a differential analysis as of February 13 to determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Product Tango (Alt. 1) or Discontinue Product Tango (Alt. 2) February 13 Continue Discontinue Differential Product Product Effects Tango (Alternative 1) (Alternative 2) Tango (Alternative 2) Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) b. Determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2).

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter25: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 2BE

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Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
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Espana Co. makes one main product, Uno, and a by-product, Dos, which splits off from the main product when the work is three-fourths completed. Dos is sold without further processing and without being placed in stock. During June, 1,200 is realized from the sale of the by-product. Make the entries to record the recovery and sale of the by-product, on account, on the assumption that the recovery is treated as one of the following: a. A reduction in the cost of the main product b. Other income
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Discontinue a Segment Product AG52 has revenues of $194,400, variable cost of goods sold of $114,600, variable selling expenses of $33,100, and fixed costs of $62,000, creating a loss from operations of $15,300. a. Prepare a differential analysis as of October 7 to determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Use a minus sign to indicate a loss. Differential Analysis Continue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2) October 7 Continue Product AG52 (Alternative 1) Discontinue Product AG52 (Alternative 2) Differential Effect on Income (Alternative 2) Revenues $fill in the blank a3aa860a905dfc3_1 $fill in the blank a3aa860a905dfc3_2 $fill in the blank a3aa860a905dfc3_3 Costs: Variable cost of goods sold fill in the blank a3aa860a905dfc3_4 fill in the blank a3aa860a905dfc3_5 fill in the blank…
Discontinue a Segment Product B has revenue of $39,500, variable cost of goods sold of $25,500, variable selling expenses of $16,500, and fixed costs of $15,000, creating a loss from operations of $17,500. Prepare a differential analysis as of May 9 to determine whether Product B should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Product B has revenue of $39,500, variable cost of goods sold of $25,500, variableselling expenses of $16,500, and fixed costs of $15,000, creating a loss from operationsof $17,500. Prepare and show in solution a differential analysis as of May 9 todetermine if Product B should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision.