Question
Differential Analysis for a Discontinued Product The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Sales Rhinebeck
Differential Analysis for a Discontinued Product The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Sales Rhinebeck Company Product-Line Income Statement For the Month Ended October 31 Hats Gloves Mufflers $64,000 $90,200 $26,400 (27,300) (33,800) (15,600) $36,700 $56,400 $10,800 (29,200) (34,900) (15,600) $7,500 $21,500 $(4,800) Cost of goods sold Gross profit Selling and administrative expenses Operating income (loss) Fixed costs are 17% 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 Revenues Costs: October 31 Continue Mufflers Discontinue Mufflers Differential Effects (Alternative 1) (Alternative 2) (Alternative 2)
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