Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 Bowls Plates Cups 2 Sales $70,800.00 $106,170.00 $31,420.00 3 Cost of goods sold 32,650.00 42,340.00 16,780.00 4 Gross profit $38,150.00 $63.830.00 $14.640.00 5 Selling and administrative expenses 27,790.00 42,350.00 16,560.00 6 Income from operations $10,360.00 $21,480.00 $(1,920.00) ixed costs are 10% of the cost of goods sold and 50% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. Required: a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "O". A colon (:) will automatically appear if required. b. Should the Cups line be retained? Explain.
Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 Bowls Plates Cups 2 Sales $70,800.00 $106,170.00 $31,420.00 3 Cost of goods sold 32,650.00 42,340.00 16,780.00 4 Gross profit $38,150.00 $63.830.00 $14.640.00 5 Selling and administrative expenses 27,790.00 42,350.00 16,560.00 6 Income from operations $10,360.00 $21,480.00 $(1,920.00) ixed costs are 10% of the cost of goods sold and 50% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. Required: a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "O". A colon (:) will automatically appear if required. b. Should the Cups line be retained? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The condensed product-line income statement for Dish N’ Dat Company for the month of March is as follows:
| Labels | |
| Costs | |
| Amount Descriptions | |
| Fixed costs | |
| Gain on sale of investments | |
| Income (loss) | |
| Loss on sale of investments | |
| Revenues | |
| Total costs | |
| Variable cost of goods sold | |
| Variable selling and administrative expenses |
Transcribed Image Text:Dish N' Dat Company
Product-Line Income Statement
For the Month Ended March 31
1
Bowls
Plates
Cups
2 Sales
$70,800.00
$106,170.00
$31,420.00
3 Cost of goods sold
32,650.00
42,340.00
16,780.00
4 Gross profit
$38,150.00
$63,830.00
$14,640.00
5 Selling and administrative expenses
27,790.00
42,350.00
16,560.00
6 Income from operations
$10,360.00
$21,480.00
$(1,920.00)
Fixed costs are 10% of the cost of goods sold and 50% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued.
Required:
a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to
the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must
enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically
appear if required.
b. Should the Cups line be retained? Explain.
Transcribed Image Text:a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text
entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
Differential Analysis
Continue (Alternative 1) or Discontinue (Alternative 2) Cups
March 31
Differential Effect
Continue Cups
Discontinue Cups
1
on Income
(Alternative 1)
(Alternative 2)
(Alternative 2)
2
3
4 (Label)
5
6
8
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