Rhinebeck Company Product-Line Income Statement For the Month Ended October 31 Hats Gloves Mufflers Sales $64,900 $88,800 $27,900 Cost of goods sold (26,100) (33,800) (15,600) Gross profit $38,800 $55,000 $12,300 (30,200) (35,800) Selling and administrative expenses Operating income (loss) (14,400) $(2,100) $8,600 $19,200 Fixed costs are 12% of the cost of goods sold and 41% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued. a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mufflers October 31 Continue Discontinue Differential Mufflers Mufflers Effects (Alternative 1) (Alternative 2) (Alternative 2) 27,900 -27,900 Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) $ $ $