Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Question
Chapter 11, Problem 2BE
To determine
Explain whether the company should continue or discontinue the Product T.
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Discontinue a Segment
Product X has revenue of $94,800, variable cost of goods sold of $61,200, variable selling expenses of $39,700, and fixed costs of $36,000, creating a loss from operations of $42,100.
Prepare a differential analysis as of May 9 to determine whether to Continue Product X (Alternative 1) or Discontinue Product X (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Differential Analysis
Continue Product X (Alt. 1) or Discontinue Product X (Alt. 2)
May 9
ContinueProduct X(Alternative 1)
DiscontinueProduct X(Alternative 2)
DifferentialEffects(Alternative 2)
Revenue
Costs:
Variable cost of goods sold
Variable selling expenses
Fixed costs
Profit (loss)
Determine if Product X should be continued (Alternative 1) or discontinued (Alternative 2).
Discontinue a Segment
Product X has revenue of $94,800, variable cost of goods sold of $61,200, variable selling expenses of $39,700, and fixed costs of $36,000, creating a
loss from operations of $42,100.
Prepare a differential analysis as of May 9 to determine whether to Continue Product X (Alternative 1) or Discontinue Product X (Alternative 2),
assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative
numbers use a minus sign.
Differential Analysis
Continue Product X (Alt. 1) or Discontinue Product X (Alt. 2)
May 9
Continue
Discontinue
Differential
Product X
Product X
Effects
(Alternative 1) (Alternative 2) (Alternative 2)
Revenue
Costs:
Variable cost of goods sold
Variable selling expenses
Fixed costs
Profit (loss)
Determine if Product X should be continued (Alternative 1) or discontinued (Alternative 2).
Discontinue a Segment
Product X has revenue of $94,800, variable cost of goods sold of $61,200, variable selling expenses of $39,700, and fixed costs of $36,000, creating a loss from operations of $42,100.
Prepare a differential analysis as of May 9 to determine whether to Continue Product X (Alternative 1) or Discontinue Product X (Alternative 2), assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Differential Analysis
Continue Product X (Alt. 1) or Discontinue Product X (Alt. 2)
May 9
Contine
Discontinue
Differential
Product X
Product X
Effects
(Alternative 1)
(Alternative 2)
(Alternative 2)
Revenue
$
$
$
Costs:
------------------
------------------
----------------
Variable cost of goods sold
Variable selling expenses
Fixed costs
Profit (loss)
$
$
$
Determine if Product X should be continued…
Chapter 11 Solutions
Managerial Accounting
Ch. 11 - Explain the meaning of (A) differential revenue,...Ch. 11 - A company could sell a building for 250,000 or...Ch. 11 - A chemical company has a commodity-grade and...Ch. 11 - A company accepts incremental business at a...Ch. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Although the cost-plus approach to product pricing...Ch. 11 - How does the target cost method differ from...Ch. 11 - Prob. 10DQ
Ch. 11 - Lease or sell Plymouth Company owns equipment with...Ch. 11 - Prob. 2BECh. 11 - Make or buy A company manufactures various-sized...Ch. 11 - Replace equipment A machine with a book value of...Ch. 11 - Prob. 5BECh. 11 - Prob. 6BECh. 11 - Prob. 7BECh. 11 - Prob. 8BECh. 11 - Differential analysis for a lease or sell decision...Ch. 11 - Prob. 2ECh. 11 - Differential analysis for a discontinued product A...Ch. 11 - Differential analysis for a discontinued product...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Make-or-buy decision Somerset Computer Company has...Ch. 11 - Prob. 8ECh. 11 - Machine replacement decision A company is...Ch. 11 - Differential analysis for machine replacement...Ch. 11 - Sell or process further Calgary Lumber Company...Ch. 11 - Sell or process further Dakota Coffee Company...Ch. 11 - Prob. 13ECh. 11 - Accepting business at a special price Box Elder...Ch. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Product cost method of product costing Smart...Ch. 11 - Target costing Toyota Motor Corporation (TM) uses...Ch. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21ECh. 11 - Total cost method of product pricing Based on the...Ch. 11 - Variable cost method of product pricing Based on...Ch. 11 - Differential analysis involving opportunity costs...Ch. 11 - Differential analysis for machine replacement...Ch. 11 - Differential analysis for sales promotion proposal...Ch. 11 - Prob. 4PACh. 11 - Product pricing and profit analysis with...Ch. 11 - Product pricing using the cost-plus approach...Ch. 11 - Prob. 1PBCh. 11 - Differential analysis for machine replacement...Ch. 11 - Prob. 3PBCh. 11 - Prob. 4PBCh. 11 - Prob. 5PBCh. 11 - Prob. 6PBCh. 11 - Analyze Pacific Airways Pacific Airways provides...Ch. 11 - Service yield pricing and differential equations...Ch. 11 - Prob. 3MADCh. 11 - Prob. 4MADCh. 11 - Aaron McKinney is a cost accountant for Majik...Ch. 11 - Prob. 3TIFCh. 11 - Decision on accepting additional business A...Ch. 11 - Accepting service business at a special price If...Ch. 11 - Identifying product cost distortion Peachtree...Ch. 11 - Prob. 1CMACh. 11 - Prob. 2CMACh. 11 - Aril Industries is a multiproduct company that...Ch. 11 - Oakes Inc. manufactured 40,000 gallons of Mononate...
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