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Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 Bowls Plates Cups 2 Sales $70,800.00 $106,170.00 $31,420.00 3 Cost of goods sold 32,650.00 42,340.00 16,780.00 4 Gross profit $38,150.00 $63.830.00 $14.640.00 5 Selling and administrative expenses 27,790.00 42,350.00 16,560.00 6 Income from operations $10,360.00 $21,480.00 $(1,920.00) ixed costs are 10% of the cost of goods sold and 50% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. Required: a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "O". A colon (:) will automatically appear if required. b. Should the Cups line be retained? Explain.

Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 Bowls Plates Cups 2 Sales $70,800.00 $106,170.00 $31,420.00 3 Cost of goods sold 32,650.00 42,340.00 16,780.00 4 Gross profit $38,150.00 $63.830.00 $14.640.00 5 Selling and administrative expenses 27,790.00 42,350.00 16,560.00 6 Income from operations $10,360.00 $21,480.00 $(1,920.00) ixed costs are 10% of the cost of goods sold and 50% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. Required: a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "O". A colon (:) will automatically appear if required. b. Should the Cups line be retained? Explain.

Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 22E
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The condensed product-line income statement for Dish N’ Dat Company for the month of March is as follows:
 
Labels  
Cash flows from investing activities  
Costs  
Amount Descriptions  
Fixed costs  
Gain on sale of investments  
Income (loss)  
Loss on sale of investments  
Revenues  
Total costs  
Variable cost of goods sold  
Variable selling and administrative expenses

 

Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 1 Bowls Plates Cups 2 Sales $70,800.00 $106,170.00 $31,420.00 3 Cost of goods sold 32,650.00 42,340.00 16,780.00 4 Gross profit $38,150.00 $63,830.00 $14,640.00 5 Selling and administrative expenses 27,790.00 42,350.00 16,560.00 6 Income from operations $10,360.00 $21,480.00 $(1,920.00) Fixed costs are 10% of the cost of goods sold and 50% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. Required: a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. b. Should the Cups line be retained? Explain.
Transcribed Image Text:Dish N' Dat Company Product-Line Income Statement For the Month Ended March 31 1 Bowls Plates Cups 2 Sales $70,800.00 $106,170.00 $31,420.00 3 Cost of goods sold 32,650.00 42,340.00 16,780.00 4 Gross profit $38,150.00 $63,830.00 $14,640.00 5 Selling and administrative expenses 27,790.00 42,350.00 16,560.00 6 Income from operations $10,360.00 $21,480.00 $(1,920.00) Fixed costs are 10% of the cost of goods sold and 50% of the selling and administrative expenses. Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued. Required: a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. b. Should the Cups line be retained? Explain.
a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. Differential Analysis Continue (Alternative 1) or Discontinue (Alternative 2) Cups March 31 Differential Effect Continue Cups Discontinue Cups 1 on Income (Alternative 1) (Alternative 2) (Alternative 2) 2 3 4 (Label) 5 6 8
Transcribed Image Text:a. Prepare a differential analysis dated March 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. Differential Analysis Continue (Alternative 1) or Discontinue (Alternative 2) Cups March 31 Differential Effect Continue Cups Discontinue Cups 1 on Income (Alternative 1) (Alternative 2) (Alternative 2) 2 3 4 (Label) 5 6 8
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