Differential Analysis for a Discontinued Product

Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N' Dat Company for the month of March is as follows: Dish N' Dat Company Product-Line Income Statement Sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Fixed costs are 16% 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 if 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 "O". Use a minus sign to indicate a loss. For the Month Ended March 31 Bowls $64,500 26,400 $38,100 29,400 $8,700 Plates $89,800 31,800 $58,000 35,400 $22,600 Cups $27,600 14,200 $13,400 15,400 $(2,000) 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 27,600 Costs varniable cost of goods sold Variable selling and admin, expenses Fixed costs Income (Loss)