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Differential Analysis Report for a Discontinued Product The condensed product-line income statement for Porcelain Tableware Company is as follows: PORCELAIN TABLEWARE COMPANY Product-Line Income Statement Bowls Plates Cups Sales $648,000 $902,000 $259,000 Cost of goods sold (259,000) (321,000) (152,000) Gross profit $581,000 $107,000 $389,000 (286,000) Selling and administrative expenses (359,000) (149,000) Operating income (loss) $103,000 $222,000 $(42,000) Fixed costs are 44% of the cost of goods sold and 14% of the selling and administrative expenses. Porcelain Tableware 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. Plates Cups PORCELAIN TABLEWARE COMPANY Product Income Differential Analysis Report Bowls Differential revenue from monthly sales: Revenue from sales $ 648,000 Differential costs of monthly sales: Variable cost of goods sold $ 902,000 $ 259,000 Variable selling and administrative expenses Monthly differential income from sales b. Which of the following statements about the Cups line is true