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			Cups
Sales	$65,800			$88,400			$27,200
Cost of goods sold	26,100			32,700			14,500
Gross profit	$39,700			$55,700			$12,700
Selling and administrative expenses	29,000			35,100			15,200
Income from operations	$10,700			$20,600			$(2,500)

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

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	$fill in the blank a66875f30fcb02c_1	$fill in the blank a66875f30fcb02c_2	$fill in the blank a66875f30fcb02c_3
Costs:
Variable cost of goods sold	fill in the blank a66875f30fcb02c_4	fill in the blank a66875f30fcb02c_5	fill in the blank a66875f30fcb02c_6
Variable selling and admin. expenses	fill in the blank a66875f30fcb02c_7	fill in the blank a66875f30fcb02c_8	fill in the blank a66875f30fcb02c_9
Fixed costs	fill in the blank a66875f30fcb02c_10	fill in the blank a66875f30fcb02c_11	fill in the blank a66875f30fcb02c_12
Income (Loss)	$fill in the blank a66875f30fcb02c_13	$fill in the blank a66875f30fcb02c_14	$fill in the blank a66875f30fcb02c_15