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 For the Month Ended March 31 Bowls Plates CupsSales$64,200 $88,800 $27,800 Cost of goods sold25,800 33,600 15,300 Gross profit$38,400 $55,200 $12,500 Selling and administrative expenses28,400 35,800 14,700 Income from operations$10,000 $19,400 $(2,200)

Fixed costs are 15% of the cost of goods sold and 37% of the selling and administrative expenses. Dish N Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued.

Question Content Area.

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 "0". Use a minus sign to indicate a loss.