Instructions Labels and Amount Descriptions Differential Analysis ! Final Question Instructions 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 1 Bowls Plates Cups 2 Sales $71,000.00 $105,700.00 $31,300.00 3 Cost of goods sold 32,600.00 42,300.00 16,800.00 4 Gross profit $38,400.00 $63,400.00 $14,500.00 5 Selling and administrative expenses 27,400.00 42,800.00 16,700.00 6 Income from operations $11,000.00 $20,600.00 $(2,200.00) Fixed costs are 15% of the cost of goods sold and 40% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. Required: a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. b. Should the Cups line be retained? Explain.Differential analysis for a discontinued product Instructions Labels and Amount Descriptions Differential Analysis ! Final Question Instructions X Differential Analysis shaded cells have feedback. X a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. Labels and Amount Descriptions X Differential Analysis Score: 52/89 Continue (Alternative 1) or Discontinue (Alternative 2) Cups Labels March 31 Cash flows from investing activities Costs Differential Effect Continue Cups Discontinue Cups on Income Amount Descriptions Fixed costs (Alternative 1) (Alternative 2) (Alternative 2) Gain on sale of investments 3 Revenues $31,300.00 $0.00 $(31,300.00) Income (loss) 4 Costs: Loss on sale of investments 5 Variable cost of goods sold 14,280.00 0.00 14,280.00 Revenues 6 Variable selling and administrative expenses 10,020.00 0.00 10,020.00 Total costs 9,200.00 9,200.00 0.00 Variable cost of goods sold 8 $(2,200.00) $(9,200.00) $(7,000.00) Variable selling and administrative expenses Points: 12.27 / 21 Feedback Check My Work Check My Work Previous NextDifferential analysis for a discontinued product Instructions Labels and Amount Descriptions Differential Analysis Final Question Final Question Shaded cells have feedback. X b. Should the Cups line be retained? Explain. O No VO Yes Points: 1/1 As indicated by the differential analysis in part (a), the income will decrease v by $2,200.00 X if the Cups line is discontinued. K Points: 1/2 Feedback Check My Work For continue and discontinue alternatives subtract the costs from the revenues. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2. Check My Work Previous Next