Differential Analysis for a Discontinued Product The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Rhinebeck Company Product-Line Income Statement For the Month Ended October 31 Hats Gloves Mufflers Sales $64,400 $89,800 $26,200 Cost of goods sold (25,800) (33,300) (15,100) Gross profit $38,600 $56,500 $11,100 Selling and administrative expenses (28,400) (34,800) (14,500) Operating income (loss) $10,200 $21,700 $(3,400) Fixed costs are 17% of the cost of goods sold and 40% 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 October 31 Continue Discontinue Differential Mufflers Mufflers Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Gross pront 538,600 356,500 too Selling and administrative expenses (28,400) (34,800) (14,500) Operating income (loss) $10,200 $21,700 $(3,400) Fixed costs are 17% of the cost of goods sold and 40% 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) discontinued (Alternative 2). If an amount is zero, enter "o". If required, use a minus sign to indicate a loss Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mufflers October 31 Continue Discontinue Differential Mufflers Mufflers Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs: Variable cost of goods sold Variable selling and admin, expenses Fixed costs Profit (Loss) b. Should the Mufflers line be retained