Product-Line Income Statement

ForMonth Ended May 31

Bowls Plates Cups

Sales $71,000 $105,700 $33,500

Cost of goods sold $32,600 $42,300 $20,600

Gross profit $38,400 $63,400 $12,900

Selling and admin expenses $27,400 $42,800 $17,200

Income from operations $11,000 $20,600 $(4,300)

Fixed costs are 15% of good sold and 30% of the selling and admin expenses. Assume that fixed costs would not be materially affected if the cups line were discontinued.

• How do I make a differential analysis dated May 31 to figure out if the cups should be continued (alternative 1) or discontinued (alternative 2)