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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
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 $65,200 588,800 $27,200 Cost of goods sold 26,900 31,900 15,800 Gross profit $38,300 $56,900 $11,400 Selling and administrative expenses 28,500 35,800 14,400 Income from operations $9,800 $21,100 $ $(3,000) Fixed costs are 15% of the cost of goods sold and 35% 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 "O". 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 Costs: : Variable cost of goods sold Variable selling and admin. expenses duni 0.1 Fixed costs Income (Loss) b. Should the Cups line be retained
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