The condensed product-line income statement for Suffolk China Ware Company for the month of December is as follows:

Suffolk China Ware Company Product-Line Income Statement For the Month Ended December 31, 2010
	Bowls	Plates	Cups
Sales	$54,000	$68,500	$24,500
Cost of goods sold	22,400	31,700	11,900
Gross profit	$31,600	$36,800	$12,600
Selling and administrative expenses	28,300	25,300	20,400
Income (loss) from operations	$ 3,300	$11,500	$(7,800)

Exercise 24(09)-3

Name:

Section:

Enter the appropriate amount or answer in the shaded cells below.

A red asterisk (*) will appear to the right of an incorrect answer in the outlined cells.

a.

SUFFOLK CHINA WARE COMPANY

Differential Product Analysis Report

For the Year Ended December 31, 2010

Bowls

Plates

Cups

Differential revenue from annual sales:

Revenues from sales

Differential cost of annual sales:

Variable cost of goods sold

Variable selling and administrative expenses

Total Variable Costs

Annual differential income from sales

b.

Should the cups be retained?

Data Below