Light Medium Dark Roast Roast Roast Sales $656,000 $896,000 $272,000 Cost of goods sold (265,000) (334,000) (143,000) Gross profit $391,000 $562,000 $129,000 Selling and administrative expenses (297,000) (351,000) (163,000) Operating income (loss) $94,000 $211,000 $(34,000) Fixed costs are 45% of the cost of goods sold and 15% of the selling and administrative expenses. Suffolk China Ware 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. SUFFOLK CHINA WARE COMPANY Product-Line Income Statement Differential Analysis Report Light Medium Roast Dark Roast Roast Differential revenue from monthly sales: Revenue from sales Differential cost of monthly sales: Variable cost of goods sold I 2001 Variable selling and administrative expenses Total differential costs Monthly differential income from sales