A condensed income statement by product line for Regal Cycle Company indicated the following sales and expenses for Dirt Bikes for the past year: Sales Cost of goods sold $48,000 25,000 Gross profit Operating expenses $23,000 26,000 Loss from operations $(3,000) It is estimated that 10% of the cost of goods sold represents fixed factory overhead costs and that 20% of the operating expenses are fixed. Since Dirt Bikes are only one of many products, the fixed costs will not be materially affected if the product is discontinued. A decision matrix for differential analysis can ignore variable cost of goods sold and fixed cost of goods sold O fixed cost of goods sold and fixed operating expenses fixed cost of goods sold and variable operating expenses O variable cost of goods sold and variable operating expenses - Previous Next >