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 $64,500 $88,600 $26,300 (26,800) (32,400) (15,700) Cost of goods sold Gross profit Selling and administrative expenses $37,700 (29,500) $8,200 $56,200 (34,000) $22,200 $10,600 (15,400) $(4,800) Operating income (loss) Fixed costs are 13% of the cost of goods sold and 39% 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. Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mufflers October 31 Continue Discontinue Differential Mufflers Mufflers Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues $ $ Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) $ b. Should the Mufflers line be retained