DIFFERENTIAL ANALYSIS QUIZ Let's say Kampuchea Accounting Services provides bookkeeping, tax, and audit services to its

[answerhappygod]

Differential Analysis Quiz Let S Say Kampuchea Accounting Services Provides Bookkeeping Tax And Audit Services To Its 1 (46.85 KiB) Viewed 41 times

DIFFERENTIAL ANALYSIS QUIZ Let's say Kampuchea Accounting Services provides bookkeeping, tax, and audit services to its clients. Top Management believes Kampuchea Accounting Services has several unprofitable customers and would like to perform differential analysis to find out how profits would change if Kampuchea Accounting Services dropped these customers. Alternative l includes the annual revenues, costs, and resulting profit if the company keeps all existing customers. 2. Alternative 2 includes the annual revenues, costs, and resulting profit if the company drops what it believes are unprofitable customers. How should management decide whether to keep all existing customers or drop certain customers? Alternative 2 Alternative 1 Drop Liepublic Keep All Unprofitable Customers Customers Revenue 7.000.000 6.000.000 Variable Cost 5.250.000 4.500.000 Fixed Cost 450.000 180.000 Use the following table to prove your answer Alternative 2 Alternative 1 Druparable Keep All Unprofitable Differential Customers Customers Amount Effect Revenue 7. 000.00 Variable Cost 5.250.000 Fixed Cost 40 1