dow Help Subscription Expired v2. I Onlne teaching and learning resource from in
ID: 2519160 • Letter: D
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dow Help Subscription Expired v2. I Onlne teaching and learning resource from ing 2018 co Oifferential Analysis for a Discontinued Product 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 Bowls Plates Cups Sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Fixed costs are 12% of the cost of goods sold ánd 38% of the selling and administrative expenses. Dish N. Dat assumes that fixed costs woul be materially affected if the Cups line were discontinued a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). I amount is zero, enter "O". Use a minus sign to indicate a loss $64,500 $89,700 $26,300 33,100 $38,300 $56,800 $11,500 35,400 $8,900 $21,200 $3,100) 26,200 14,800 29,400 14,600 Differential Analysis Continue Cups (Alt. 1) or Discontinue Cups (AIt. 2) March 31 Continue Cucs (Ntermative 1) Discontinue cus (Aternative 2) Dfferential efect on ?ncre (Aemative 2) 6,300 26.300 Check Hy Work Next Exit Submit Assignment for Gra F9Explanation / Answer
a.
Working:
b. Cups should be retained.
Cups is contributing $4,224 towards recovery of fixed costs. If cups is stopped , the compnay would loose this and hence the overall income will come down by this amount.
Continue Cups (Alternative 1) Disontinue Cups (Alternative 2) Differential effect Sales 180500 154200 -26300 Costs: Variable Cost of goods sold 65208 52184 -13024 Variable Selling and admn.expenses 49228 40176 -9052 Fixed Costs 39064 39064 0 Total Costs 153500 131424 -22076 Income / (Loss) 27000 22776 -4224Related Questions
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