=+E12-3 Differential analysis report for a discontinued product Obj 1 SPREADSHEET

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a. Differential income:

bowls, $46,450 The condensed product-line income statement for Country Ceramics Company for the current year is as follows:

COUNTRY CERAMICS COMPANY Product-Line Income Statement For the Year Ended December 31, 2008 Bowls Plates Cups Sales $132,000 $108,000 $83,000 Cost of goods sold 71,000 55,000 49,000 Gross profit $ 61,000 $ 53,000 $34,000 Selling and administrative expenses 35,000 24,000 38,000 Income from operations $ 26,000 $ 29,000 $(4,000)

Fixed costs are 15% ofthe cost of goods sold and 28% ofthe selling and administrative expenses. Country Ceramics assumes that fixed costs would not be materially affected ifthe Cups line were discontinued.