Answer:
A) Differential analysis is shown below
B) its product should be continue.
Explanation:
As per the data given in the question,
a)
Continue product Discontinue product Differential
Tango(Alt 1) Tango(Alt 2) Effects (Alt 2)
Revenue $1,150,000 $0 -$1,150,000
Costs:
Variable COG Sold -$850,000 $0 $850,000
Variable selling and admin expenses -$275,000 $0 $850,000
Fixed costs -$125,000 $0 $275,000
Profit(Loss) -$100,000 -$125,000 -$25,000
b)
As per analysis discontinuance of product Tango will enhance the amount of loss by $25,000, so it is recommended to continue the operation.
