Product Alpha has revenue of $101,590, variable cost of goods sold of $51,430, variable selling expenses of $21,010, and fixed costs of $36,680, creating a loss from operations of $7,530. Required: 1. Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. 2. Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2). Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. Differential Analysis Continue (Alternative 1) or Discontinue (Alternative 2) Product Alpha December 10 1 Continue Product Alpha Discontinue Product Alpha Differential Effect on Income 2 (Alternative 1) (Alternative 2) (Alternative 2) 3 4 Costs: 5 6 7 8 9 Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2). The company is indifferent since the result is the same regardless of which alternative is chosen. Continued Discontinued

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3E: Differential analysis for a discontinued product A condensed income statement by product line for...

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Product Alpha has revenue of $101,590, variable cost of goods sold of $51,430, variable selling expenses of $21,010, and fixed costs of $36,680, creating a loss from operations of $7,530.

	Required:
1.	Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
2.	Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2).

Prepare a differential analysis as of December 10 to determine whether Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2), assuming that fixed costs are unaffected by the decision. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.

Differential Analysis

Continue (Alternative 1) or Discontinue (Alternative 2) Product Alpha

December 10

1		Continue Product Alpha	Discontinue Product Alpha	Differential Effect on Income
2		(Alternative 1)	(Alternative 2)	(Alternative 2)
3
4	Costs:
5
6
7
8
9

Determine if Product Alpha should be continued (Alternative 1) or discontinued (Alternative 2).

The company is indifferent since the result is the same regardless of which alternative is chosen.

Continued

Discontinued

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