Product-Line Income Statement For the Month Ended October 31 Hats Mufflers Gloves $88,700 (31,800) $27,300 (14,700) Sales $64,200 Cost of goods sold Gross profit (27,100) $37,100 $56,900 $12,600 Selling and administrative expenses Operating income (loss) (35,700) (14,900) $(2,300) (28,400) $21,200 $8,700 Fixed costs are 15% of the cost of goods sold and 36% of the selling and administrative expenses. Rhinebeck Company assumes that ixed costs would not be materially affected if the Gloves line were discontinued.
Product-Line Income Statement For the Month Ended October 31 Hats Mufflers Gloves $88,700 (31,800) $27,300 (14,700) Sales $64,200 Cost of goods sold Gross profit (27,100) $37,100 $56,900 $12,600 Selling and administrative expenses Operating income (loss) (35,700) (14,900) $(2,300) (28,400) $21,200 $8,700 Fixed costs are 15% of the cost of goods sold and 36% of the selling and administrative expenses. Rhinebeck Company assumes that ixed costs would not be materially affected if the Gloves line were discontinued.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Differential Analysis for a Discontinued Product
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Transcribed Image Text:Product-Line Income Statement
For the Month Ended October 31
Hats
Mufflers
Gloves
$88,700
(31,800)
$27,300
(14,700)
Sales
$64,200
Cost of goods sold
Gross profit
(27,100)
$37,100
$56,900
$12,600
Selling and administrative expenses
Operating income (loss)
(35,700)
(14,900)
$(2,300)
(28,400)
$21,200
$8,700
Fixed costs are 15% of the cost of goods sold and 36% of the selling and administrative expenses. Rhinebeck Company assumes that
ixed costs would not be materially affected if the Gloves line were discontinued.
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