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do show working of how answers are gotten Fixed costs are 15% of the cost of goods sold and 40% of the selling and administrative
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Fixed costs are 15% of the cost of goods sold and 40% of the selling and administrative expenses. Rhinebe a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternati- 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 27,500 o $ -27,500 Costs: Variable cost of goods sold 0 Variable selling and admin. expenses code Fixed costs Profit (Loss) 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 566,000 $89,800 $27,500 Cost of goods sold (26,100) (33,500) (15,500) Gross profit $39,900 $56,300 $12,000 Selling and administrative expenses (30,400) (34,800) (15,300) Operating income (loss) $9,500 $21,500 $(3,300) Fixed costs are 15% 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 Step by Step Solution
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