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  3. the condensed product-line income statement for po

the condensed product-line income statement for Porcelain Tableware Company is as follows: ...

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Accounting

the condensed product-line income statement for Porcelain Tableware Company is as follows:

PORCELAIN TABLEWARE COMPANY Product-Line Income Statement
Bowls Plates Cups
Sales $650,000 $904,000 $274,000
Cost of goods sold (257,000) (319,000) (144,000)
Gross profit $393,000 $585,000 $130,000
Selling and administrative expenses (287,000) (352,000) (149,000)
Operating income (loss) $106,000 $233,000 $(19,000)

Fixed costs are 43% of the cost of goods sold and 13% of the selling and administrative expenses. Porcelain Tableware assumes that fixed costs would not be significantly affected if the Cups line were discontinued.

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a. Prepare a differential analysis report for all three products.

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PORCELAIN TABLEWARE COMPANY Product Income Differential Analysis Report Bowls Plates Cups Differential revenue from monthly sales: Revenue from sales Differential costs of monthly sales: Variable cost of goods sold Variable selling and administrative expenses Monthly differential income from sales

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