eBook Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N Dat Company for the month of March is as follows: Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 Bowls Plates Cups Sales $65,400 $89,000 $26,600 Cost of goods sold 26,900 32,200 15,500 Gross pront $38,500 $56,800 $11,100 Selling and administrative expenses 29,300 34,400 16,000 Income from operations $9,200 $22,400 $(4,900) Fixed costs are: 17% of the cost of goods sold and 41% of the selling and administrative expenses. Dish N Dat assumes that fixed costs would not be materially affected it the Cups line were discontinued. a. Prepare a differential analysis dated March 31 to determine it Cups should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter For Use a minus sign to indicate a loss. Differential Analysis Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2) March 31 Continue Cups (Alternative 1) Discontinue Cups (Alterative 2) DifferentiarErfection Income (Alternative 2) Revenues 26,600 26.000 0 Costs Check My Work Fixed costs are 17% of the cost of goods sold and 41% of the selling and administrative expenses. Dish N Dat assumes that fixed costs would not be materially affected in the Cups line were discontinued. a. Prepare a differential analysis dated March 31 to determine ir Cups should be continued (Alternative 1) or discontinued (Alternative 2). It an amount is zero, enter *O*. Use a minus sign to indicate a loss. Differential Analysis Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2) March 31 Continue Cups (Alternative 1) Discontinue Cups (Alternative 2) Differential Effect on Income (Alternative 2) Revenues 25,600 0 26, 20 V Costs: Variable cost of goods sold 12.865 12.865 Variable selling and admin expenses 9.610 9,40 0 0 Fixed costs -12.075 X 0 Income (Loss) -7,780 X -12.075 X 4.295 For continue and discontinue alternatives subtract the costs from the revenue. Use percentages to separate variable from foxed costs. Determine the differential effect on income of the revenues, costs, and income foss) by subtracting alternative 2 from alternative 1 Learning objective 1 Check My Work