Often, business decisions involve choosing between alternative courses of action, and companies tend to want to find the alternative that offers the highest revenue or the most significant reduction in costs. Non-routine decisions use differential analysis. These include make-or-buy choices, whether to retain or drop a product line, or even if a customer should be retained or dropped. In using differential analysis, common revenues and costs are factored out of the assessment, thereby focusing on revenue and cost information that is specific to a given product, customer, or another point to be analyzed. Use the basic knowledge acquired from differential analysis to respond to the following discussion task: Continuing with the company selected in Unit 2, think about the types of financial data that would be included and excluded in differential analysis. Propose which specific revenues and costs should be considered in an evaluation to drop or keep a: Customer Product line In addition, explain sunk and opportunity costs as they relate to your selected company. Should these costs be considered in differential analysis? Why or why not?

Note: Your discussion should have a minimum of 2 450 words. Please include a word count. Following the APA standard, use references and in-text citations from the textbook and any other sources.

Continuing with the company selected in Unit 2, think about the types of financial data that would be included and excluded in differential analysis. Propose which specific revenues and costs should be considered in an evaluation to drop or keep a:

Customer

Product line

In addition, explain sunk and opportunity costs as they relate to your selected company. Should these costs be considered in differential analysis? Why or why not?

for a book publishing company, data from uni 2

NLC is a publisher of text books and decides to print an sell 8000 copies. The following variables will be included in the calculation of contribution margin and contribution margin ratio;

Fixe cost; training sessions6000, typesetting 36000, art work 2000, editing 4000

Variable expenses per book; printing and binding $3.00, book store discount 2.40, shipping cost $1.60, authors royalty $1

Each book sells at $ 20 per copy the contribution margin and contribution margin ratio will be calculated as follows;

Sales (8000 x $20). $160 000. 100%

Variable cost. (8000 x $8) $64 000……………40%

Contribution Margin. $96 000. 60%

Fixed cost. $48 000

Net income. $48 000