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Chapter 11 A The management of ABC Corporation is alarmed by their operating losses. They are considering dropping the product line. The company accountants have prepared the following analysis to help make this decision ABC Corporation Income Statement For the Year Ended December 31, 20XX Total A Sales Revenue 5930,000 $375,000 $355.000 Variable Costs 56.0 267.000 240.000 Contribution Margin 423.000 1.000 115.000 Fed Costs Manufacturing 375.000 225.000 150.000 Selling and Administrative 17.000 Total Fixed Costs Operating Income (om) Sul.com $18.00 132.00 of the company stops selling the product in line B, the company will be able to void 80% of the fixed manufacturing costs and 100% of the fixed selling and administrative Required 1. Prepare a differential analysis to show whether the corporation should drop the Bproduct line 2. Should the product line be dropped? Explain and discuss your answer B MAYAR Corporation produces XY product. The selling price for XY product is $250 MAYAR produces and sells 5.000 of XY per year. Cost data are as follows Variable manufacturing Sus per unit Variable selling and administrative 516 per unit Fixed manufacturing Ford selling and administrative $180.00 per year A potential deal has come up for a one-time sale of 32 units at a special price of S120 per unit. The marketing manager states that the sale will not negatively impact the company regular sales activities and will require the normal variable manufacturing costs and selling and administrative costs. The production manager states that there is plenty of excess capacity and the deal will not impact fixed costs. The controller points out however, that because the expected increase in ves are equal to the expected increase in costs to fill the order, the deal will not have any impact on the bottom line Required:Prepare differential analysis to decide whether the company should accept the special order or not Discuss you

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