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 Cups

Sales 71000 105700 31300

Cost of goods sold 32600 42300 16800

Gross profit 38400 63400 14500

Selling and administrative expenses 27400 42800 16700

Income from operations 11000 20600 (2200).

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.

Please use the format below

Exercise 25-4 Name: Section: Score: 0% Key Code: [Key code here] Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. Enter a zero in cells you would otherwise leave blank. a. Differential Analysis Continue or Discontinue Cups March 31, 2016 Continue Cups (Alternative 1) Discontinue Cups (Alternative 2) 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 if the cups were discontinued. by Differential Effect on Income (Alternative 2)