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q4 Differential Analysis for a Discontinued Product The condensed product-line Income...

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Accounting

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Differential Analysis for a Discontinued Product The condensed product-line Income statement for Dish N'Dot 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 $65,100 $90,400 $27,400 Cost of goods sold 26,500 32,800 15,100 Gross profit $38,600 $57,600 $12,300 Selling and administrative expenses 29,600 35,500 15,400 Income from operations $9,000 $22,100 $(3,100) Fixed costs are 17% of the cost of goods sold and 36% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected il 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 to 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 Costs: Variable cost of goods sold Variable selling and admin, expenses Fixed costs Income (Loss)

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