Ch. 25: Homework =103 =R ' The condensed product-line income statement for Porcelain Tableware Company for the month of May is as follows: Porcelain Tableware Company Product-Line Income Statement For the Month Ended May 31 Bowls Plates Cups ; Sales $64,000 $88,700 $27,700 Cost of goods sold 26,000 33,400 14,500 Gross profit $38,000 $55,300 $13,200 Selling and administrative expenses 29,600 34,000 16,400 , Income from operations $8,400 $21,300 $(3,200) Fixed costs are 17% of the cost of goods sold and 42% of the selling and administrative expenses. Porcelain Tableware assumes that fixed costs would not be materially affected if the Cups line were discontinued. a. Prepare a differential analysis dated May 31 to determine whether to Continue Cups (Alternative 1) or Discontinue Cups (Alternative 2). If an amount is zero, enter "0", For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2) For the Month Ended May 31 Continue Cups Discontinue Cups Differential Effect (Alternative 1) (Alternative 2) (Alternative 2) Revenues 27,700 | $| L Costs: Variable cost of goods mo_cH Variable selling and admin. expenses D Fixed costs Profit (loss) mU mD E e, A Previous Next V