Discontinuance of Product Line: The Decision on discontinuing the product line is an important decision taken on the basis of net differential effect on revenue and cost of the product discontinued on the overall the financial income of the company. Therefore, for such analysis, the revenue lost is taken in to account and is compared with the savings in cost taken for discontinuance. However, while considering the savings in cost, only relevant cost shall be taken in to account like variable cost or avoidable fixed cost. The fixed cost incurred on the product line through allocation of general admin overheads , depreciation on fixed asset, shall be treated as irrelevant as these will not have any effect with the change in decision. Requirement1: The Differential analysis of discontinuance of product line shall be done.

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Answer 1

Question

Chapter 26, Problem 2CP

To determine

Discontinuance of Product Line:

The Decision on discontinuing the product line is an important decision taken on the basis of net differential effect on revenue and cost of the product discontinued on the overall the financial income of the company.

Therefore, for such analysis, the revenue lost is taken in to account and is compared with the savings in cost taken for discontinuance. However, while considering the savings in cost, only relevant cost shall be taken in to account like variable cost or avoidable fixed cost. The fixed cost incurred on the product line through allocation of general admin overheads, depreciation on fixed asset, shall be treated as irrelevant as these will not have any effect with the change in decision.

Requirement1:

The Differential analysis of discontinuance of product line shall be done.

To determine

Requirement 2:

TheRecommendation on discontinuance of Product T205.

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Answer 2

Question

Chapter 26, Problem 2CP

To determine

Discontinuance of Product Line:

The Decision on discontinuing the product line is an important decision taken on the basis of net differential effect on revenue and cost of the product discontinued on the overall the financial income of the company.

Therefore, for such analysis, the revenue lost is taken in to account and is compared with the savings in cost taken for discontinuance. However, while considering the savings in cost, only relevant cost shall be taken in to account like variable cost or avoidable fixed cost. The fixed cost incurred on the product line through allocation of general admin overheads, depreciation on fixed asset, shall be treated as irrelevant as these will not have any effect with the change in decision.

Requirement1:

The Differential analysis of discontinuance of product line shall be done.

To determine

Requirement 2:

TheRecommendation on discontinuance of Product T205.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 26, Problem 2CP

To determine

Discontinuance of Product Line:

The Decision on discontinuing the product line is an important decision taken on the basis of net differential effect on revenue and cost of the product discontinued on the overall the financial income of the company.

Therefore, for such analysis, the revenue lost is taken in to account and is compared with the savings in cost taken for discontinuance. However, while considering the savings in cost, only relevant cost shall be taken in to account like variable cost or avoidable fixed cost. The fixed cost incurred on the product line through allocation of general admin overheads, depreciation on fixed asset, shall be treated as irrelevant as these will not have any effect with the change in decision.

Requirement1:

The Differential analysis of discontinuance of product line shall be done.

To determine

Requirement 2:

TheRecommendation on discontinuance of Product T205.

Expert Solution & Answer

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Answer 4

Question

Chapter 26, Problem 2CP

To determine

Discontinuance of Product Line:

The Decision on discontinuing the product line is an important decision taken on the basis of net differential effect on revenue and cost of the product discontinued on the overall the financial income of the company.

Therefore, for such analysis, the revenue lost is taken in to account and is compared with the savings in cost taken for discontinuance. However, while considering the savings in cost, only relevant cost shall be taken in to account like variable cost or avoidable fixed cost. The fixed cost incurred on the product line through allocation of general admin overheads, depreciation on fixed asset, shall be treated as irrelevant as these will not have any effect with the change in decision.

Requirement1:

The Differential analysis of discontinuance of product line shall be done.

To determine

Requirement 2:

TheRecommendation on discontinuance of Product T205.

Expert Solution & Answer

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Answer 5

Chapter 26, Problem 2CP

To determine

Discontinuance of Product Line:

The Decision on discontinuing the product line is an important decision taken on the basis of net differential effect on revenue and cost of the product discontinued on the overall the financial income of the company.

Therefore, for such analysis, the revenue lost is taken in to account and is compared with the savings in cost taken for discontinuance. However, while considering the savings in cost, only relevant cost shall be taken in to account like variable cost or avoidable fixed cost. The fixed cost incurred on the product line through allocation of general admin overheads, depreciation on fixed asset, shall be treated as irrelevant as these will not have any effect with the change in decision.

Requirement1:

The Differential analysis of discontinuance of product line shall be done.

To determine

Requirement 2:

TheRecommendation on discontinuance of Product T205.

Answer 6

Chapter 26, Problem 2CP

To determine

Discontinuance of Product Line:

The Decision on discontinuing the product line is an important decision taken on the basis of net differential effect on revenue and cost of the product discontinued on the overall the financial income of the company.

Therefore, for such analysis, the revenue lost is taken in to account and is compared with the savings in cost taken for discontinuance. However, while considering the savings in cost, only relevant cost shall be taken in to account like variable cost or avoidable fixed cost. The fixed cost incurred on the product line through allocation of general admin overheads, depreciation on fixed asset, shall be treated as irrelevant as these will not have any effect with the change in decision.

Requirement1:

The Differential analysis of discontinuance of product line shall be done.

Answer 7

Chapter 26, Problem 2CP

To determine

Discontinuance of Product Line:

The Decision on discontinuing the product line is an important decision taken on the basis of net differential effect on revenue and cost of the product discontinued on the overall the financial income of the company.

Therefore, for such analysis, the revenue lost is taken in to account and is compared with the savings in cost taken for discontinuance. However, while considering the savings in cost, only relevant cost shall be taken in to account like variable cost or avoidable fixed cost. The fixed cost incurred on the product line through allocation of general admin overheads, depreciation on fixed asset, shall be treated as irrelevant as these will not have any effect with the change in decision.

Requirement1:

The Differential analysis of discontinuance of product line shall be done.

Answer 8

To determine

Requirement 2:

TheRecommendation on discontinuance of Product T205.

Answer 9

To determine

Requirement 2:

TheRecommendation on discontinuance of Product T205.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 26 - Prob. 1QC Ch. 26 - Prob. 2QC Ch. 26 - Prob. 3QC Ch. 26 - Prob. 4QC Ch. 26 - Prob. 5QC Ch. 26 - Prob. 6QC Ch. 26 - Prob. 7QC Ch. 26 - The IRR is Learning Objective 4 the interest rate...Ch. 26 - Prob. 9QC Ch. 26 - Ian Corp, is considering two expansion projects....

Requirement 2: TheRecommendation on discontinuance of Product T205.

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Chapter 26 Solutions

Requirement 2:

TheRecommendation on discontinuance of Product T205.