Differential Analysis Report for a Discontinued Product

The condensed product$-$line income statement for Blonde Espresso Company is as follows:

BLONDE ESPRESSO COMPANY

Product$-$Line Income Statement

$\backslash$table$[[,\backslash$table$[[$Light$],[$Roast$]],\backslash$table$[[$Medium$],[$Roast$]],\backslash$table$[[$Dark$],[$Roast$]],],[$Sales$,$$$750,000,$$$1,175,000,$$$487,500,],[$Cost of goods sold,$(450,000),(700,000),(390,000),],[$Gross profit,$$300,000,$$$475,000,$$$97,500,],[$Selling and administrative expenses,$(135,0,00),(350,000),(150,000),],[$Operating income $($loss$),$$$165,000,$$$125,000,,],[,,,,]]$

Fixed costs are $40\%$ of the cost of goods sold and $18\%$ of the selling and administrative expenses. Blonde Espresso assumes that fixed costs would not be significantly affected if the Dark Roast line were discontinued.

a$.$ Prepare a differential analysis report for all three products.

BLONDE ESPRESSO COMPANY

Product$-$Line Income Statement

Differential Analysis Report

$\backslash$table$[[,\backslash$table$[[$Light$],[$Roast$]],\backslash$table$[[$Medium$],[\text{'}$Roast$]],\backslash$table$[[$Dark$],[$Roast$]]],[$Differential revenue from monthly sales:,,,$]]$

Differential cost of monthly sales: