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The condensed product-line income statement for Suffolk China Ware Company for the month of May is...

The condensed product-line income statement for Suffolk China Ware Company for the month of May is as follows:

Suffolk China Ware Company
Product-Line Income Statement
For the Month Ended May 31
Bowls Plates Cups
Sales $65,200 $88,700 $27,300
Cost of goods sold 25,500 33,100 15,600
Gross profit $39,700 $55,600 $11,700
Selling and administrative expenses 28,400 34,200 15,400
Income from operations $11,300 $21,400 $(3,700)

Fixed costs are 14% of the cost of goods sold and 45% of the selling and administrative expenses. Suffolk China Ware 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)
For the Month Ended May 31
Continue Cups
(Alternative 1)		 Discontinue Cups
(Alternative 2)		 Differential Effect
on Income
(Alternative 2)
Revenues $ $ $
Costs:
Variable cost of goods sold
Variable selling and admin. expenses
Fixed costs
Income (Loss) $ $ $

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ekkarill92 answered 2 years ago
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