Problem $2$

A condensed income statement by product line for Brion Sporting Goods indicated the following for Baseball Equipment for the past year: $($All amounts in SAR$)$

Sales: $5,400,000$

Cost of goods sold: $3,700,000$

Gross profit: $1,700,000$

Operating expenses: $1,850,000$

Loss from operations: $(150,000)$

It is estimated that $15\%$of the cost of goods sold represents fixed factory overhead costs, and $20\%$of the operating expenses are fixed. Because Baseball Equipment is only one of the many products, the fixed costs will not be materially affected if the product is discontinued.

Please answer the below using critical thinking and APA $7$ citation:

$1-$Prepare a differential analysis to determine whether Baseball Equipment should be continued $($Alternative $1)$or discontinued $($Alternative $2).$

$2-$State your decision and the SAR difference.