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Product T has revenue of $194,700, variable cost of goods sold of $114,300, variable selling expenses of $32,700, and fixed costs of $58,600, creating a loss from operations of $10,900.
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 zero.
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
T (Alternative 1) T (Alternative 2) on Income
(Alternative 2)
Revenues
Costs:
Variable cost of goods sold
Variable selling and admin. expenses
Fixed costs
Income (Loss)
Determine if Product T should be continued (Alternative 1) or discontinued (Alternative 2).
