Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N' Dat Company for the month of May is as follows Dish N' Dat Company Product-Line I For the Honth Ended Hay 31 Cups 105,700 42,300 $63,400 42,800 %20,600 $33,500 Cost of goods sold Gross profit Selling and administrative expenses $71,000 32,600 $38,100 27.400 $11,000 $12,900 17,200 s(4,300) Income from operations % of the cost of goods sold and 30% of the selling and administrative expenses. Dish N Dat assumes thet fixed costs would not Fixed costs are 15 be materially affected if the Cups line were discontinued a, nepare a differential analysis dated May 3, to determine i, Cups should be continued (Alternative 1) or dscontinued (Alternative 2), if an amount in zera, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign Continue Cups (At. 1) or Discontinun Cups (AIt. 2) T Discontinon (Alternative 1) 210.200lx (Alternative 2) Alternative 2) inam , u ant a 7,400} x {7e.zoe) x t2.20a) retial affect or incemie ef en the revenue. Uce percentages to s the revenues. costs, and incorme (loss) by subtracting alternative i from alterrative 2. Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2) Continue Cups (Alternative 1) Discontinue Cups (Alternative 2) (Alternative 2) 33,500 X 210,200 x 95.500 x Vanable selling and admin, expenses7400x 176.700 x vanable cost of goods sold 20,600 x 70,200 x 17200 x 17.200X Fxed cets 14.325 X Income (Los) 26.220X 26,220 x Fer continue and discontinue alternatives subtract the costs from the revenue Determine the differential effect on income re . Use percentages to separate varlable from fixed costs of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2 b. Should the Cups line be retained? Explain. Yes as indicated tby the differential analysis in part (a), the income will decrease 4,300 X it the Cups line is discontinued. continue and discontinue alternatives subtract the costs from t Determine the ditferential eftect on income o percentages to separate variable fron fixed costs of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2 2 more Check uty Werk uses t Prevo Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N' Dalt Company for the month of May is as follows: Dish N Dat Company Product-Line Income Statement For the Month Ended May 31 BowlsPlatesCups $71,000 $105,700 $33,500 32,60042,300 20,600 $38,400 $63,400 $12,900 Sales Cost of goods sold Gross profit Seling and administrative expenses 27,4004,80 17,200 Income from operations Fixed costs are 15% o e cost of goods sod and 30% of the sele and admi trative expenses D sh nr Dat ass es that ed o sts tid not be maealya tadi the Cues ine et ast timed a. Prepare a differential analysis dated May 31 to determine if Cups should be continued (Aermative 1) or scontinued (Alternative 2). If an amount is zero, enter "o". For those baces in which you must enter subtracted or segative numbers use a $11,000 $20,600 $4,300) minus sign. Dferential Analysis Continge Cups (Alt. 1) or Discontinue Cups (Alt. 2) For the Month Ended May 31 Differential Effect (Alternative 2) 33500| x Continue Oups Discontinue tupsonIncome (Alternative 2] (Alternative 1) 210.2001 x evenues 176.7001 x Costs varabe cont f poo 9%.590 x4500 x20.0 x 17,200 x Vanable selling and idmis, excpeses 87400 X70200 X 3435 14375 Foxed costs 143251 x | 143sx 26.220 X 2622 X Income [Lass) Fer continue and discortinue aternaties subtradt the cots from the revenus. Use perceitages to separat varible from feed corts Dbermine the difirediukeffect o income o PreviousNt Werk 2 nore Check Wj ien uses remaining ubmit Aignment for Gradig