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Decision: Requirement 2. Wil dropping DVDs add $36,000 to operating incomo? Explain. Incur fixed axpenses to conclude that dropping the DVD product line would add $36,000 to operating income of the company drops the DVD product line, it allocated to the DVD help make this decision: Top managers of Sunset Video are starred by their operating losses. They are considering dropping the DVD product line. Company accountants have propared the following analysi Click the icon to view the analysis.) Total foxed costs will not change if the company stops soling DVDs Read the requirements Requirement 1. Prepare a differential analysis to show whather Sunset Video should drop the DVD product line. Begin by preparing a differential analysis to show whether Sunset Video should drop the DVDs product lina (Entor decreases to profits with a parentheses or minus sign) Expected decrease in revenues-Dropping DVDs Expected decrease in costs-Dropping DVDs Expected in operating income 1 1 Data table Sunset Video Income Statement For the Year Ended December 31, 2024 Net Sales Revenue $ Total Blu-ray Discs DVD Discs 427,000 $ 306,000 $ 121,000 244,000 151.000 93,000 183,000 155,000 28,000 Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative 130,000 67,000 79,000 56,000 51,000 11,000 197,000 135,000 62,000 Total Fixed Costs $ (14,000) $ 20,000 $ (34,000) Operating Income (Loss) th Requirements ni 1. Prepare a differential analysis to show whether Sunset Video should drop the DVD product line. 2. Will dropping DVDs add $34,000 to operating income? Explain. on Decision: Sensor Systems manufactures an optical switch that it uses in its final product. The switch has the following manufacturing costs per unit Click the icon to view the costs.) (Click the icon to view additional information) Prepare an outsourcing analysis to determine whether Sensor Systems should make or buy the switch (For the Difference column, use a minus son or parentheses only when the cont Outsourcing exceeds the cost of making the switches in-house.) Make Outsource optical switch optical switch Difference (Make Outsource) Variable costs Direct materials Direct labor Variable overhead Purchase price from outsider Total differential cost per unit Data table Direct materials $ 9.00 Direct labor 3.00 Variable overhead 2.00 Fixed overhead 8.50 Manufacturing product cost $ 22.50 T