please answer correctly

a. Discontinue Cups (Alternative 2) Differential Effect on Income (Alternative 2) Differential Analysis Continue or Discontinue Cups March 31, 2016 Continue Cups (Alternative 1) Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Income (loss) b. The Cups line should be since income would by if the cups were discontinued. a. Alternative 1 loss, $2,200 EX 24-4 Differential analysis for a discontinued product OBJ. 1 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, 2016 Bowls Plates Sales $71,000 $105,700 Cost of goods sold 32,600 42,300 Gross profit $38,400 $ 63,400 Selling and administrative expenses 27,400 42,800 Income from operations $11,000 $ 20,600 Cups $31,300 16,800 $14,500 16,700 $(2,200) Fixed costs are 15% of the cost of goods sold and 40% of the selling and administra- tive expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. a. Prepare a differential analysis dated March 31, 2016, to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). b. Should the Cups line be retained? Explain