Differential Analysis for a Discontinued ProductThe condensed product-line income statement forRhinebeck Company for the month of October is asfollows:SalesCost of goods soldGross profitSelling and administrative expensesOperating income (loss)Rhinebeck CompanyRevenues.Costs:Product-Line Income StatementFor the Month Ended October 31Fixed costsVariable cost of goods soldVariable selling and admin.expensesProfit (Loss)HatsFixed costs are 15% of the cost of goods sold and 42%of the selling and administrative expenses. RhinebeckCompany assumes that fixed costs would not bematerially affected if the Gloves line were discontinued.a. Prepare a differential analysis dated October 31 todetermine 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 aloss.$65,200(27,000)$38,200(28,500)$9,700Differential AnalysisContinue (Alt. 1) or Discontinue (Alt. 2) MufflersOctober 31Gloves$89,300(32,000)$57,300(34,200)$23,100Mufflers$27,000(14,800)$12,200(16,000)$(3,800)ContinueDiscontinueMufflersMufflers(Alternative (Alternative1)2)b. Should the Mufflers line be retained?DifferentialEffects(Alternative2)

Differential analysis compared cost the revenues and costs in case of continuance and discontinuance…

Hats $65,200 (27,000) $38,200 (28,500) $9,700 Gloves $89,300 (32,000) $57,300 (34,200) $23,100 Muffler $27,00 (14,80 $12,20 (16,00 $(3,80 of goods sold s profit g and administrative expenses ating income (loss) ed costs are 15% of the cost of goods sold and 42%

Hats $65,200 (27,000) $38,200 (28,500) $9,700 Gloves $89,300 (32,000) $57,300 (34,200) $23,100 Muffler $27,00 (14,80 $12,20 (16,00 $(3,80 of goods sold s profit g and administrative expenses ating income (loss) ed costs are 15% of the cost of goods sold and 42%

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4E: Differential analysis for a discontinued product The condensed product-line income statement for...

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Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N’ Dat Company for the month of March is as follows: Dish N’ Dat Company Product-Line Income Statement For the Month Ended March 31 Bowls Plates CupsSales$64,200 $88,800 $27,800 Cost of goods sold25,800 33,600 15,300 Gross profit$38,400 $55,200 $12,500 Selling and administrative expenses28,400 35,800 14,700 Income from operations$10,000 $19,400 $(2,200) Fixed costs are 15% of the cost of goods sold and 37% of the selling and administrative expenses. Dish N’ Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. Question Content Area. a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate a loss.
Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N’ Dat Company for the month of May is as follows: Dish N' Dat CompanyProduct-Line Income StatementFor the Month Ended May 31 Bowls Plates Cups Sales $71,000 $105,700 $33,500 Cost of goods sold 32,600 42,300 20,600 Gross profit $38,400 $63,400 $12,900 Selling and administrative expenses 27,400 42,800 17,200 Income from operations $11,000 $20,600 $(4,300) Fixed costs are 15% of the cost of goods sold and 30% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. a. Prepare a differential analysis dated May 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus…
Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N' Dat Company for the month of March is as follows: Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 Bowls Plates Cups Sales $71,000 $105,700 $31,300 Cost of goods sold 32,600 42,300 16,800 Gross profit $38,400 $63,400 $14,500 Selling and administrative expenses 27,400 42,800 16,700 Income from operations $11,000 $20,600 $(2,200) Fixed costs are 15% of the cost of goods sold and 40% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate a loss. Differential Analysis Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2) March 31 Continue Cups (Alternative 1)…
Differential Analysis for a Discontinued Product 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 $65,500 $89,200 $26,800 Cost of goods sold (26,000) (33,400) (14,000) Gross profit $39,500 $55,800 $12,800 Selling and administrative expenses (29,200) (34,000) (16,300) Operating income (loss) $10,300 $21,800 $(3,500) Fixed costs are 15% of the cost of goods sold and 44% 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…
Differential Analysis for a Discontinued Product The condensed product-line income statement for Dish N' Dat Company for the month of May is as follows: Dish N' Dat Company Product-Line Income Statement For the Month Ended May 31 Bowls Plates Cups Sales $71,000 $105,700 $33,500 Cost of goods sold 32,600 42,300 20,600 Gross profit $38,400 $63,400 $12,900 Selling and administrative expenses 27,400 42,800 17,200 Income from operations $11,000 $20,600 $(4,300) Fixed costs are 15% of the cost of goods sold and 30% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. a. Prepare a differential analysis dated May 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2)…
Diff Analysis & Product Pricing:
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