* CengageNOWv2 |x C Power Serve Comp. X ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentScssionLocator &inprogress=false eBook Calculator Print Item The conderised pruduct-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) $11,000 $21,900 $(700) Operating incorne (loss) Fixed costs are 12% of the cost of goods sold and 36% of the selling and administrative expenses. Rhinebeck Company assunes that fixed costs would not be materially affecter discontinued. a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontiriued (Alternative 2). If an amount is zero, enter "0 indicate a loss. Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mufflers October 31 Discontinue Mufflers Differential Fffects Continue Mufflers (Alternative 1) (Altermative 2) (Alternative 2) 181900X $ 154,300 S 27,600 Revenues Costs: 59,556 X -12.144 71,700X Variable cost of goods sold 15,456 94,744 X 110,200 Variable selling and admin, expenses 9,280 78.000X 68,720 X Fixed costs 6,176X 32,200 S 26,024 Profit (Loss) Fearhank
* CengageNOWv2 |x C Power Serve Comp. X ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentScssionLocator &inprogress=false eBook Calculator Print Item The conderised pruduct-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) $11,000 $21,900 $(700) Operating incorne (loss) Fixed costs are 12% of the cost of goods sold and 36% of the selling and administrative expenses. Rhinebeck Company assunes that fixed costs would not be materially affecter discontinued. a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontiriued (Alternative 2). If an amount is zero, enter "0 indicate a loss. Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mufflers October 31 Discontinue Mufflers Differential Fffects Continue Mufflers (Alternative 1) (Altermative 2) (Alternative 2) 181900X $ 154,300 S 27,600 Revenues Costs: 59,556 X -12.144 71,700X Variable cost of goods sold 15,456 94,744 X 110,200 Variable selling and admin, expenses 9,280 78.000X 68,720 X Fixed costs 6,176X 32,200 S 26,024 Profit (Loss) Fearhank
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 87PSB
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