1. Differential Analysis for a Discontinued Product

The condensed product-line income statement for Rhinebeck Company for the month of October is as follows:

Rhinebeck Company Product-Line Income Statement For the Month Ended October 31
	Hats			Gloves			Mufflers
Sales	$65,900			$90,200			$26,400
Cost of goods sold	(27,300)			(32,700)			(13,900)
Gross profit	$38,600			$57,500			$12,500
Selling and administrative expenses	(29,700)			(35,300)			(15,300)
Operating income (loss)	$8,900			$22,200			$(2,800)

Fixed costs are 14% of the cost of goods sold and 42% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued.

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

2.Segment analysis for a service company

Charles Schwab Corporation (SCHW) is one of the more innovative brokerage and financial service companies in the United States. The company recently provided information about its major business segments as follows (in millions):

	Investor Services		Advisor Services
Revenues	$5,411		$2,067
Operating income	2,031		962
Depreciation	180		54

a. If Schwab decided to sell its Advisor Services accounts to another company, estimate how much operating income would decline under the following assumptions.