Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Chapter 10, Problem 4E
a)
To determine
Differential Analysis: Differential analysis refers to the analysis of differential revenue that could be gained or differential cost that could be incurred from the available alternative options of business.
To Prepare: The differential analysis for Company DD, as on March 31.
b)
To determine
Whether to retain the cups line.
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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 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)…
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)…
Chapter 10 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Ch. 10 - Explain the meaning of (A) differential revenue,...Ch. 10 - A company could sell a building for 250,000 or...Ch. 10 - A chemical company has a commodity-grade and...Ch. 10 - A company accepts incremental business at a...Ch. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Although the cost-plus approach to product pricing...Ch. 10 - How does the target cost method differ from...Ch. 10 - Prob. 10DQ
Ch. 10 - Prob. 1BECh. 10 - Prob. 2BECh. 10 - Prob. 3BECh. 10 - Replace equipment A machine with a book value of...Ch. 10 - Prob. 5BECh. 10 - Prob. 6BECh. 10 - Prob. 7BECh. 10 - Prob. 8BECh. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Differential analysis for machine replacement Kim...Ch. 10 - Sell or process further Calgary Lumber Company...Ch. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Product cost method of product costing Smart...Ch. 10 - Target costing Toyota Motor Corporation (TM) uses...Ch. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Product decisions under bottlenecked operations...Ch. 10 - Total cost method of product pricing Based on the...Ch. 10 - Variable cost method of product pricing Based on...Ch. 10 - Differential analysis involving opportunity costs...Ch. 10 - Differential analysis for machine replacement...Ch. 10 - Differential analysis for sales promotion proposal...Ch. 10 - Prob. 4PACh. 10 - Product pricing using the cost-plus approach...Ch. 10 - Product pricing and profit analysis with...Ch. 10 - Prob. 1PBCh. 10 - Differential analysis for machine replacement...Ch. 10 - Prob. 3PBCh. 10 - Prob. 4PBCh. 10 - Prob. 5PBCh. 10 - Prob. 6PBCh. 10 - Service yield pricing and differential equations...Ch. 10 - Prob. 2ADMCh. 10 - Prob. 3ADMCh. 10 - Aaron McKinney is a cost accountant for Majik...Ch. 10 - Prob. 3TIF
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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.arrow_forwardCalculator Print Item Differential Analysis for a Discontinued Product 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 $65,000 $90,100 $27,000 Cost of goods sold (26,900) (32,300) (14,300) Gross profit $38,100 $57,800 $12,700 Selling and administrative expenses (29,200) (34,400) (15,300) Operating income (loss) $8,900 $23,400 $(2,600) Fixed costs are 12% of the cost of goods sold and 45% 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. Differential Analysis Continue (Alt. 1) or Discontinue…arrow_forwardDifferential 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…arrow_forward
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