Question

Chapter 24 & 25 Mastery (Mastery) Calculator For the Year Ended December 31, 2048 Raw Wool Wool Yarn Rug Yarn $200,000 $155,000 $187,000 Total Company $542,000 Sales Costs of goods sold: Variable costs $(18,600) (12,400) $(103,800) (69,200) Fixed costs $(48,000) (32,000) $(80,000) $120,000 $(37,200) (24,800) $(62,000) $125,000 Total cost of goods sold $(31,000) $(173,000) $369,000 Gross profit $124,000 Operating expenses: Variable expenses $(53,100) $(65,850) Fixed expenses $(5,000) (89,000) $(94,000) $26,000 $(7,750) (77,000) $(84,750) $39,250 (106,200) $(159,300) Total operating expenses Operating income (loss) (272,200) $(338,050) $30,950 $(34,300) Complete the following table using the data in the preceding income statement to compare the effects of dropping the rug yarn line of products. If required, use a minus sign to indicate a loss. Differential Analysis Continue Rug Yarn (Alternative 1) or Discontinue Rug Yarn (Alternative 2) December 31, 20Y8 Continue Rug Yarn (Alternative 1) Discontinue Rug Yarn (Alternative 2) Differential Effects (Alternative 2) Revenues $ 187,000 $ -187,000 Costs: Variable Fixed Profit (loss) Check My Work

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer Differential Analysis Continue Rug Yarn (alternative 1) or Discountinue Rug Yarn (alternative 2) December 31, 2048 Continue Rug Yarn (Alternative 1) Discountinue Rug Yarn (Alternative Differential Effects (Alternative 2) 7 Revenues 187000 -187000 8 Costs 9 Variable (37200+5310 90300 90300 10 Fixed (24800+106200 131000 131000 11 Profit (loss) -34300 - 131000 -96700 12 13 For any help please comment in the comment box 14