Question

25-2 Practice Exercises eBook Show Me How Calculator Discontinue a Segment Product T has revenue of $ 193,300, variable cost of goods sold of $114,900, variable selling expenses of $31,600, and fixed costs of $58,800, creating a loss from operations of $12,000. Prepare a differential analysis as of May 9, to determine whether Product T should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter 'o'. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue Product T (Alt. 1) or Discontinue Product T (Alt. 2) May 9 Continue Product Discontinue Product Differential Effect on Income T(Alternative 1) T(Alternative 2) (Alternative 2) Revenues Costs: Variable cost of goods sold Variable selling expenses Fixed costs Income (Loss) Determine if Product T should be continued (Alternative 1) or discontinued (Alternative 2).

Answer 1

	Continue Product T	Discontinue Product T	Differential effect on income
	Alternative 1	Alternative 2	Alternative 2
Revenues	193300	0	-193300
Costs:
Variable cost of goods sold	-114900	0	114900
Variable selling expenses	-31600	0	31600
Fixed costs	-58800	-58800	0
Income(loss)	-12000	-58800	-46800
Product T should be continued (Alternative 1)