Product J Is One of the Many Products Manufactured and Sold

question 144

Essay

Product J is one of the many products manufactured and sold by Oceanside Company. An income statement by product line for the past year indicated a net loss for Product J of $12,250. This net loss resulted from sales of $275,000, cost of goods sold of $186,500, and operating expenses of $85,750. It is estimated that 30% of the cost of goods sold represents fixed factory overhead costs and that 40% of the operating expense is fixed. If Product J is retained, the revenue, costs, and expenses are not expected to change significantly from those of the current year. Because of the large number of products manufactured, the total fixed costs and expenses are not expected to decline significantly if Product J is discontinued.
Prepare a differential analysis report, dated February 8 of the current year, on the proposal to discontinue Product J.

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Definitions:

Identical Human Twins

Twins who develop from a single fertilized egg that splits and forms two embryos, sharing the same genetic material.

Heterozygous

A genetic condition where an organism has two different alleles of a gene, one inherited from each parent.

Huntington Disease

A genetic disorder that causes the progressive breakdown of nerve cells in the brain, leading to physical and mental deterioration.

Genotypic

Referring to the genetic constitution of an organism, including all of its genes and alleles, which influences its phenotypic traits.