Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 2BE
To determine
Differential Analysis: Differential analysis refers to the analysis of differential revenue that could be gained or differential cost that could be incurred from the available alternative options of business.
Whether to continue or discontinue Product AG52.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Discontinue a Segment
Product X has revenue of $94,800, variable cost of goods sold of $61,200, variable selling expenses of $39,700, and fixed costs of $36,000, creating a
loss from operations of $42,100.
Prepare a differential analysis as of May 9 to determine whether to Continue Product X (Alternative 1) or Discontinue Product X (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.
Differential Analysis
Continue Product X (Alt. 1) or Discontinue Product X (Alt. 2)
May 9
Continue
Discontinue
Differential
Product X
Product X
Effects
(Alternative 1) (Alternative 2) (Alternative 2)
Revenue
Costs:
Variable cost of goods sold
Variable selling expenses
Fixed costs
Profit (loss)
Determine if Product X should be continued (Alternative 1) or discontinued (Alternative 2).
Discontinue a Segment
Product A has revenue of $195,700, variable cost of goods sold of $114,800, variable selling expenses of $31,100, and fixed costs of $60,200, creating a loss
from operations of $10,400.
Prepare a differential analysis as of May 9, to determine whether Product A 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.
Differential Analysis
Continue Product A (Alt. 1) or Discontinue Product A (Alt. 2)
May 9
Differential Effect
Discontinue Product
A (Alternative 2)
Continue Product
A (Alternative 1)
on Income
(Alternative 2)
Revenues
Costs:
Variable cost of goods sold
Variable selling expenses
Fixed costs
Continued
Discontinued
ct A should be continued (Alternative 1) or discontinued (Alternative 2)
De
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.
Chapter 10 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Ch. 10 - Explain the meaning of (A) differential revenue,...Ch. 10 - A company could sell a building for 250,000 or...Ch. 10 - A chemical company has a commodity-grade and...Ch. 10 - A company accepts incremental business at a...Ch. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Although the cost-plus approach to product pricing...Ch. 10 - How does the target cost method differ from...Ch. 10 - Prob. 10DQ
Ch. 10 - Prob. 1BECh. 10 - Prob. 2BECh. 10 - Prob. 3BECh. 10 - Replace equipment A machine with a book value of...Ch. 10 - Prob. 5BECh. 10 - Prob. 6BECh. 10 - Prob. 7BECh. 10 - Prob. 8BECh. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Differential analysis for machine replacement Kim...Ch. 10 - Sell or process further Calgary Lumber Company...Ch. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Product cost method of product costing Smart...Ch. 10 - Target costing Toyota Motor Corporation (TM) uses...Ch. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Product decisions under bottlenecked operations...Ch. 10 - Total cost method of product pricing Based on the...Ch. 10 - Variable cost method of product pricing Based on...Ch. 10 - Differential analysis involving opportunity costs...Ch. 10 - Differential analysis for machine replacement...Ch. 10 - Differential analysis for sales promotion proposal...Ch. 10 - Prob. 4PACh. 10 - Product pricing using the cost-plus approach...Ch. 10 - Product pricing and profit analysis with...Ch. 10 - Prob. 1PBCh. 10 - Differential analysis for machine replacement...Ch. 10 - Prob. 3PBCh. 10 - Prob. 4PBCh. 10 - Prob. 5PBCh. 10 - Prob. 6PBCh. 10 - Service yield pricing and differential equations...Ch. 10 - Prob. 2ADMCh. 10 - Prob. 3ADMCh. 10 - Aaron McKinney is a cost accountant for Majik...Ch. 10 - Prob. 3TIF
Knowledge Booster
Similar questions
- Discontinue a Segment Product AG52 has revenues of $194,700, variable cost of goods sold of $115,500, variable selling expenses of $31,100, and fixed costs of $59,300, creating a loss from operations of $11,200. 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 14650f02dfdc057_1 $fill in the blank 14650f02dfdc057_2 $fill in the blank 14650f02dfdc057_3 Costs: Variable cost of goods sold fill in the blank 14650f02dfdc057_4 fill in the blank 14650f02dfdc057_5 fill in the blank…arrow_forwardDiscontinue a Segment Product Sigma has revenue of $436,000, variable cost of goods sold of $320,000, variable selling expenses of $53,000, and fixed costs of $71,000, creating a loss from operations of $8,000. Prepare a differential analysis as of December 10 to determine whether to Continue Product Sigma (Alternative 1) or Discontinue Product Sigma (Alternative 2), assuming that 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. Differential Analysis Continue Product Sigma (Alt. 1) or Discontinue Product Sigma (Alt. 2) May 9 Continue Discontinue Differential Product Sigma Product Sigma (Alternative 1) (Alternative 2) (Alternative 2) Effects Revenue Costs: Variable cost of goods sold Variable selling expenses Fixed costs Profit (loss) Determine if Product Sigma should be continued (Alternative 1) or discontinued (Alternative 2).arrow_forwardDiscontinue 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 of $(11,400). a. Prepare a differential analysis as of February 13 to determine 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). Proviousarrow_forward
- Discontinue a Segment Product Tango has revenue of $195,500, variable cost of goods sold of $114,300, variable selling expenses of $33,100, and fixed costs of $60,100, creating an operating loss of $(12,000). 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 Discontinue Product Continue Differential Product Effects Tango Tango (Alternative 1) (Alternative 2) (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).arrow_forwardDiscontinue a Segment Product Omega has revenue of $195,000, variable cost of goods sold of $113,900, variable selling expenses of $33,600, and fixed costs of $61,100, creating an operating loss of $(13,600). a. Prepare a differential analysis as of January 15 to determine if Product Omega should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount "0". If required, use a minus sign to indicate a loss. Line Item Description Revenues Costs: Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Product Omega January 15 Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (loss) Continue Discontinue Product Omega Product Omega (Alternative 1) (Alternative 2) (Alternative 2) 0 0000 Differential Effects b. Determine if Product Omega should be continued (Alternative 1) or discontinued (Alternative 2). zero, enterarrow_forwardDiscontinue a Segment Product Tango has revenue of $1,150,000, variable cost of goods sold of $850,000, variable selling expenses of $275,000, and fixed costs of $125,000, creating an operating loss of $(100,000). 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 Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) Continue Discontinue Product Product Tango Tango (Alternative 1) (Alternative 2) 0000 Differential Effects (Alternative 2)arrow_forward
- A manufacturer is considering eliminating a segment because it shows the following $6,300 loss. All $21,100 of its variable costs are avoidable, and $38,500 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Complete this question by entering your answers in the tabs below. Required A $ 63,300 21,100 42,200 48,500 (6,300) Required B Compute the incomoarrow_forwardA manufacturer is considering eliminating a segment because it shows the following $6,100 loss. All $20,300 of its variable costs are avoidable, and $36,700 of its fixed costs are avoidable.arrow_forwardplease help with correct workingarrow_forward
- A.4arrow_forwardCentral Industries has three product lines: A, B, and C. The information given below is available. Central Industries is thinking about dropping Product C because it is reporting a loss. Assume Central Industries drops Product C Pand does not replace it. What will happen to operating income Sales Variable costs Contribution margin Avoidable fixed costs Unavoidable fixed costs Operating income(loss) Product A $100,000 76,000 24,000 9,000 6.000 $9.000 Product B $90,000 48.000 42,000 18,000 9,000 $15.000 Product C $44,000 35,000 9,000 3,000 7.700 $(1.700) increase by $600 increase by $1,700 decrease by S6,000 decrease by S9,000 () increase by $2,400 ()arrow_forwardDifferential analysis for a discontinued product The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Fixed costs are 20% of the cost of goods sold and 30% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued. a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2). b. Should the Mufflers line be retained? Explain.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College