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Category > Management Posted 06 Apr 2018 My Price 6.00

Country Ceramics Company

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% of the cost of goods sold and 28% of the selling and administrative expenses. Country Ceramics assumes that fixed costs would not be materially affected if the Cups line were discontinued.

a. Prepare a differential analysis report for all three products for 2008.

b. Should the Cups line be retained? Explain.

Answers

Maurice Tutor
(5)
Status NEW Posted 06 Apr 2018 06:04 PM My Price 6.00

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