The condensed product$-$line income statement for Northern Lights Company for the month of August is as follows:

Northern Lights Company

Product$-$Line Income Statement

For the Month Ended August $31$

Fixed costs are $13\%$ of the cost of goods sold and $35\%$ of the selling and administrative expenses. Northern Lights Company

assumes that fixed costs would not be materially affected if the Socks line were discontinued.

a$.$ Prepare a differential analysis dated August $31$ to determine if Socks 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$.2)$ Socks

August $31$

b$.$ Should the Socks line be retained?