EX 11-4 Differential analysis for a discontinued product

EX 11-4 Differential analysis for a discontinued product Obj. 1 The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Fixed costs are 20% of the cost of goods sold and 30% 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). b. = Should the Mufflers line be retained? Explain