om/ilm/takeAssigen design ..HVURUT yun g eBook Show Me How Calculator Discontinue a Segment Product Tango has revenue of $1,150,000, variable cost of goods sold of $850,000, variable selling expenses of $275,000, and fixed costs of $125,000, creating an operating loss of $(100,000). a. Prepare a differential analysis as of February 13 to determine if Product Tango should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Product Tango (Alt. 1) or Discontinue Product Tango (Alt. 2) February 13 Continue Discontinue Differential Product Product Effects Tango Tango (Alternative 2) (Alternative 1) (Alternative 2) Revenues $ 1,150,000 $ 0 $ 1,150,000 Costs: Variable cost of goods sold 850,000 V 0 0 x Vanable selling and admin. expenses -275,000 Fixed costs -125,000 125,000 V Profit (Loss) 5 .100,000 S -125,000 $ -25,000 Feedback Check My Work For continue and discontinue alternatives subtract the costs from the revenue. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2. eBook Show Me How Calculator Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $55 per unit (100 bottles), including fixed costs of $12 per unit. A proposal is offered to purchase small bottles from an outside source for $36 per unit, plus $3 per unit for freight. a. Prepare a differential analysis dated January 25 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Buy Differential Bottles Bottles Effects (Alternative 1) (Alternative 2) (Alternative 2) Unit costs: Purchase price Freight Variable costs Fixed factory overhead Total unit costs 4 b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles. Previous Next