Product AG52 has revenues of 195600 variable cost of goods s

Product AG52 has revenues of $195,600, variable cost of goods sold of $114,200, variable selling expenses of $31,600, and fixed costs of $58,100, creating a loss from operations of $8,300.

a. Prepare a differential analysis as of October 7 to determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter \"0\". Use a minus sign to indicate a loss.

b. Determine if Product AG52 should be continued (Alternative 1) or discontinued (Alternative 2).

Differential Analysis
Continue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2)
October 7
	Continue Product AG52 (Alternative 1)	Discontinue Product AG52 (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$	$	$
Costs:
Variable cost of goods sold
Variable selling expenses
Fixed costs
Income (Loss)	$	$	$

Solution

Answer a. Differential Analysis Continue Product AG52 (Alt. 1) or Discontinue Product AG52 (Alt. 2) October 7 Continue Product AG52 (Alternative 1) Discontinue Product AG52 (Alternative 2) Differential Effect on Income (Alternative 2) Revenues                               195,600.00                                          -                               (195,600.00) Costs: Variable cost of goods sold                               114,200.00                                          -                                 114,200.00 Variable selling expenses                                 31,600.00                                          -                                    31,600.00 Fixed costs                                 58,100.00                           58,100.00                                                 -   Income (Loss)                                 (8,300.00)                        (58,100.00)                               (49,800.00) Answer b. Product AG52 should be continued. If Discountinued the Loss will be increased by $49,800.