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Homework answers / question archive / Differential Analysis In each of four independent cases, the amount of differential revenue or dif- ferential cost is as follows (parentheses indicate decreases): 1 2 4 Increases (decreases) in: Revenue $18,000 $-0- ? Costs
Differential Analysis In each of four independent cases, the amount of differential revenue or dif- ferential cost is as follows (parentheses indicate decreases): 1 2 4 Increases (decreases) in: Revenue $18,000 $-0- ? Costs.. ? ($12,000) ? $-0-
For each case, determine the missing amount that would be necessary for the net differential amount to be
a. $8,000
b. ($4,000)
Indicate whether your answers reflect increases or decreases.
Answer
--requirement [a]
| 1 | 2 | 3 | 4 | |
| Increase (decrease) in: | ||||
| Revenues | $18,000 | $0 | ($4,000) | $8,000 |
| Costs | $10,000 | ($8,000) | ($12,000) | $0 |
| Check amount = $ 8000 required = Increase (decrease) in revenues MINUS Increase (decrease) in Costs | $8,000 | $8,000 | $8,000 | $8,000 |
--Requirement [b]
| 1 | 2 | 3 | 4 | |
| Increase (decrease) in: | ||||
| Revenues | $18,000 | $0 | ($16,000) | ($4,000) |
| Costs | $22,000 | $4,000 | ($12,000) | $0 |
| Check amount = $ (4000) required = Increase (decrease) in revenues MINUS Increase (decrease) in Costs | ($4,000) | ($4,000) | ($4,000) | ($4,000) |
