Differential Analysis Report for a Discontinued Product The condensed product-line income statement for Suffolk China Ware Company is as follows: SUFFOLK CHINA WARE COMPANY Product-Line Income Statement Bowls Plates Cups Sales $654,000 $885,000 $274,000 Cost of goods sold (273,000) (327,000) (145,000) Gross profit $381,000 $558,000 $129,000 Selling and administrative expenses (295,000) (356,000) (152,000) Operating income (loss) $86,000 $202,000 $(23,000) Fixed costs are 39% of the cost of goods sold and 12% of the selling and administrative expenses. Suffolk China Ware 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. SUFFOLK CHINA WARE COMPANY Product Income Differential Analysis Report Bowls Plates Differential revenue from monthly sales: Revenue from sales $ 654,000 $ 885,000 Cups $ 274,000 Differential costs of monthly sales: Variable cost of goods sold Fixed cost of goods sold Monthly differential income from sales $ b. Which of the following statements about the Cups line is true