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The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Rhinebeck Company Product-Line Income Statement For the Month Ended
The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Rhinebeck Company Product-Line Income Statement For the Month Ended October 31 Hats Gloves Mufflers Sales $65,000 $89,800 $27,600 Cost of goods sold (26,300) (33,400) (14,000) Gross profit $38,700 $56,400 $13,600 Selling and administrative expenses (28,500) (35,000) (14,800) Operating income (loss) $10,200 $21,400 $(1,200) Fixed costs are 13% of the cost of goods sold and 37% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued. Question Content Area 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 Mufflers (Alternative 1) Discontinue Mufflers (Alternative 2) Differential Effects (Alternative 2) Revenues $fill in the blank 791a2bf5201afc8_1 27,600 $fill in the blank 791a2bf5201afc8_2 0 $fill in the blank 791a2bf5201afc8_3 27,600 Costs: Variable cost of goods sold fill in the blank 791a2bf5201afc8_4 14,000 fill in the blank 791a2bf5201afc8_5 fill in the blank 791a2bf5201afc8_6 Variable selling and admin. expenses fill in the blank 791a2bf5201afc8_7 fill in the blank 791a2bf5201afc8_8 0 fill in the blank 791a2bf5201afc8_9 Fixed costs fill in the blank 791a2bf5201afc8_10 -3,419 fill in the blank 791a2bf5201afc8_11 fill in the blank 791a2bf5201afc8_12 0 Profit (Loss) $fill in the blank 791a2bf5201afc8_13 13,600 $fill in the blank 791a2bf5201afc8_14 $fill in the blank 791a2bf5201afc8_15
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