The condensed product-line income statement for Dish N' Dat Company for the month of March is as follows:

Fixed costs are 15% of the cost of goods sold and 40% of the selling and administrative 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.

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Dish N'Dat Company Product-Line Income Statement For the Month Ended March 31, 2016 Bowls $71,000 $105,700 $31300 32,600 42,300 16800 $38,400 63,400 $14500 27400 42800 16700 511,000 20,600 $2,200 lates Cups Sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations