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Differential Analysis for a Discontinued Product

The condensed product-line income statement for Dish N Dat Company for the month of March is as follows:

Dish N Dat Company Product-Line Income Statement For the Month Ended March 31
	Bowls			Plates			Cups
Sales	$64,700			$90,400			$26,700
Cost of goods sold	27,000			33,400			14,700
Gross profit	$37,700			$57,000			$12,000
Selling and administrative expenses	29,700			34,600			14,500
Income from operations	$8,000			$22,400			$(2,500)

Fixed costs are 12% of the cost of goods sold and 41% of the selling and administrative expenses. Dish N Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued.

a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate a loss.

Differential Analysis
Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2)
March 31
	Continue Cups (Alternative 1)	Discontinue Cups (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$fill in the blank a77d910bb021015_1	$fill in the blank a77d910bb021015_2	$fill in the blank a77d910bb021015_3
Costs:
Variable cost of goods sold	fill in the blank a77d910bb021015_4	fill in the blank a77d910bb021015_5	fill in the blank a77d910bb021015_6
Variable selling and admin. expenses	fill in the blank a77d910bb021015_7	fill in the blank a77d910bb021015_8	fill in the blank a77d910bb021015_9
Fixed costs	fill in the blank a77d910bb021015_10	fill in the blank a77d910bb021015_11	fill in the blank a77d910bb021015_12
Income (Loss)	$fill in the blank a77d910bb021015_13	$fill in the blank a77d910bb021015_14	$fill in the blank a77d910bb021015_15

b. Should the Cups line be retained?

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