1)
DIFFERENTIAL ANALYSIS | |||
CONTINUE (ALT 1) OR DISCONTINUE (ALT 2) MANGO COLA | |||
Feb-29 | |||
CONTINUE ALTERNATIVE 1 MANGO COLA | DISCONTINUE ALTERNATIVE 2 MANGO COLA | DIFFERENTIAL EFFECTS (ALT 2) | |
REVENUES | $ 236,900 | $ - | $ (236,900) |
COSTS: | |||
VARIABLE COST OF GOODS SOLD | $ 92,400 | $ - | $ (92,400) |
VARIABLE OPERATING EXPENSES | $ 115,340 | $ - | $ (115,340) |
FIXED EXPENSES | $ 48,260 | $ 48,260 | $ - |
PROFIT (LOSS) | $ (19,100) | $ (48,260) | $ (29,160) |
FIXED EXPENSES | |
COST OF GOODS SOLD | = 110,000 * 16% = $ 17,600 |
OPERATING EXPENSES | = 146,000 * 21% = $ 30,660 |
$ 48,260 |
VARIABLE EXPENSES | |
COST OF GOODS SOLD | = $110,000 - $ 17,600 = $92,400 |
OPERATING EXPENSES | = $146,000 - $ 30,660 = $115,340 |
SHOW FORMULA:
DIFFERENTIAL ANALYSIS | |||
CONTINUE (ALT 1) OR DISCONTINUE (ALT 2) MANGO COLA | |||
47150 | |||
CONTINUE ALTERNATIVE 1 MANGO COLA | DISCONTINUE ALTERNATIVE 2 MANGO COLA | DIFFERENTIAL EFFECTS (ALT 2) | |
REVENUES | 236900 | 0 | =+C5-B5 |
COSTS: | |||
VARIABLE COST OF GOODS SOLD | 92400 | 0 | =+C7-B7 |
VARIABLE OPERATING EXPENSES | 115340 | 0 | =+C8-B8 |
FIXED EXPENSES | =+B18 | =+B9 | =+C9-B9 |
PROFIT (LOSS) | =+B5-SUM(B7:B9) | =+C5-SUM(C7:C9) | =+C11-B11 |
2) MANGO COLA SHOULD BE RETAINED.
Differential Analysis for a Discontinued Product A condensed income statement by product line for Warrick Beverage...
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