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Category > Management Posted 21 Jan 2018 My Price 9.00

uffolk China Ware Company

Differential Analysis for a Discontinued Product

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, 2014
  Bowls   Plates   Cups
Sales $64,100     $88,700     $26,400  
Cost of goods sold 26,900     32,600     14,400  
Gross profit $37,200     $56,100     $12,000  
Selling and administrative expenses 30,400     34,000     15,400  
Income from operations $6,800     $22,100     $(3,400)  

Fixed costs are 17% of the cost of goods sold and 43% of the selling and administrative expenses. Suffolk China Ware assumes that fixed costs would not be materially affected if the Cups line were discontinued.

Prepare a differential analysis dated December 31, 2014, to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter zero "0".

 

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Maurice Tutor
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Status NEW Posted 21 Jan 2018 10:01 PM My Price 9.00

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