Question
Differential Analysis for a Discontinued Product The condensed product-line income statement for Porcelain Tableware Company for the month of May is as follows: Porcelain
Differential Analysis for a Discontinued Product 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 $65,900 $90,100 $27,300 Cost of goods sold 26,700 33,000 15,200 Gross profit $39,200 $57,100 $12,100 Selling and administrative expenses 30,300 Income from operations $8,900 35,500 $21,600 14,500 $(2,400) Fixed costs are 12% of the cost of goods sold and 40% of the selling and administrative expenses. Porcelain Tableware assumes that fixed costs would not be materially affected if the Cups line were discontinued.
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