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Differential Analysis Report for a Discontinued Product The condensed product-line income statement for Porcelain Tableware Company is as follows: PORCELAIN TABLEWARE COMPANY Product-Line Income Statement

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Differential Analysis Report for a Discontinued Product The condensed product-line income statement for Porcelain Tableware Company is as follows: PORCELAIN TABLEWARE COMPANY Product-Line Income Statement Bowls Plates Cups Sales $904,000 (328,000) $655,000 (267,000) $388,000 (290,000) $269,000 (146,000) $123,000 Cost of goods sold Gross profit Selling and administrative expenses Operating Income (loss) $576,000 (342,000) (162,000) $98,000 $234,000 $(39,000) Fixed costs are 45% of the cost of goods sold and 16% of the selling and administrative expenses. Porcelain Tableware assumes that fixed costs would not be significantly affected if the Cups line were discontinued. a. Prepare a differential analysis report for all three products, PORCELAIN TABLEWARE COMPANY Product Income Differential Analysis Report Bowls Cups Plates Fixed costs are 45% of the cost of goods sold and 16% of the selling and administrative expenses. Porcelain Tableware assumes that feed costs would not be significantly affected if the Cups line were discontinued. a. Prepare a differential analysis report for all three products, PORCELAIN TABLEWARE COMPANY Product Income Differential Analysis Report Bowls Cups Differential revenue from monthly sales: Revenue from sales Differential costs of monthly sales: Variable cost of goods sold Variable selling and administrative expenses Plates Monthly differential income from sales

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