The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Rhinebeck CompanyProduct-Line Income StatementFor the Month Ended October 31   Hats   Gloves   Mufflers Sales $65,800    88,500   $27,600       Cost of goods sold (25,800)   (32,100)   (13,800)       Gross profit $40,000    56,400   $13,800       Selling and administrative expenses (29,000)   (34,500)   (14,500)       Operating income (loss) $11,000    $21,900   $(700)       Fixed costs are 12% of the cost of goods sold and 36% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued. a.  Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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The condensed product-line income statement for Rhinebeck Company for the month of October is as follows:

Rhinebeck Company
Product-Line Income Statement
For the Month Ended October 31
  Hats   Gloves   Mufflers
Sales $65,800    88,500   $27,600      
Cost of goods sold (25,800)   (32,100)   (13,800)      
Gross profit $40,000    56,400   $13,800      
Selling and administrative expenses (29,000)   (34,500)   (14,500)      
Operating income (loss) $11,000    $21,900   $(700)      

Fixed costs are 12% of the cost of goods sold and 36% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued.

a.  Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.

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