Differential Analysis | |||
Continue Fruit Cola (Alt. 1) or Discontinue Fruit Cola (Alt. 2) | |||
January 5 | |||
Continue Fruit Cola | Discontinue Fruit Cola | Differential Effect on Income | |
Revenue | $ 237,000 | $ - | $ (237,000) |
Costs | |||
Variable cost of goods sold | $ 93,740 | $ - | $ (93,740) |
Variable operating expenses | $ 113,600 | $ - | $ (113,600) |
Fixed Costs | $ 43,660 | $ 43,660 | $ - |
Income (Loss) | $ (14,000) | $ (43,660) | $ (29,660) |
Total Cost Method
a.
Total Cost = 180 X 8000 + (361,100 + 126,900) = $ 1,928,000
Total Cost per unit = 1,928,000 / 8,000 = $ 241 per unit
b.
Return desired = 14% X 1,046,630 = $ 146,528.2
Markup percentage = 146,528.2 / 1,928,000 = 7.6%
c.
Selling price = 241 X (100 + 7.6%) = $ 259.32
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage...
Differential Analysis for a Discontinued Product A condensed Income statement by product line for Healthy Beverage Inc, indicated the following for Fruit Cola for the past year Sales $232,400 Cost of goods sold 110,000 $122,400 Gross profit Operating expenses 143,000 Loss from operations $(20,600) It is estimated that 13% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed...
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: $237,800 Sales Cost of goods sold 108,000 Gross profit $129,800 Operating expenses 143,000 Loss from operations $(13,200) It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 20% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed...
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: Sales $236,000 Cost of goods sold 108,000 Gross profit $128,000 Operating expenses 146,000 Loss from operations $(18,000) It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed...
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: Sales $233,800 Cost of goods sold 109,000 Gross profit $124,800 Operating expenses 146,000 Loss from operations $(21,200) It is estimated that 13% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed...
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: Sales Cost of goods sold Gross profit $235,200 111,000 Operating expenses $124,200 144,000 $(19,800) Loss from operations It is estimated that 14% of the cost of goods sold represents fixed factory overhead costs and that 18% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed...
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: Sales $234,900 Cost of goods sold 109,000 Gross profit $125,900 Operating expenses 143,000 Loss from operations $(17,100) It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs and that 21% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed...
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: Sales $236,900 112,000 Cost of goods sold Gross profit $124,900 Operating expenses 142,000 $(17,100) Loss from operations It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 22% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed...
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: $234,400 110,000 Sales Cost of goods sold Gross profit Operating expenses $124,400 142,000 Loss from operations $(17,600) It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed...
Differential Analysis for a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past yeat: Sales Cost of goods sold Gross profit Operating expenses Loss from operations It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed costs will not be materially...
Differential Analysisfor a Discontinued Product A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: Sales $234,600 Cost of goods sold 112,000 Gross profit $122,600 Operating expenses 145,000 Loss from operations $(22,400) It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Because Fruit Cola is only one of many products, the fixed costs...