E12-3. Differential analysis report for a discontinued product bi 1 2 The condensed product-line income statement for Blonde Espresso Company is as follows: Dark Roast BLONDE ESPRESSO COMPANY Product-Line Income Statement Light Medium Roast Roast Sales $ 750,000 $1,175,000 Cost of goods sold (450,000) (700,000) Gross profit $ 300,000 $ 475,000 Selling and administrative expenses (135,000) (350,000) Operating income (loss) $ 165,000 $ 125,000 $ 487,500 (390,000) $ 97,500 (150,000) $ (52,500) Fixed costs are 40% of the cost of goods sold and 18% 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. ANSWER b. Should the Dark Roast line be retained? Explain