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Differential Analysis Report for a Discontinued Product The condensed product-line income statement for Dinner Ware Company i
Fixed costs are 40% of the cost of goods sold and 18% of the selling and administrative expenses. Dinner Ware assumes that fi
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Answer #1
Bowls Plates Cups
Differential revenue from monthly sales
Revenue from sales 1500000 2350000 975000
Differential costs of monthly sales
Variable cost of goods sold 540000 840000 468000
Variable selling and administrative expenses 221400 574000 246000
761400 1414000 714000
Monthly Differential income from sales 738600 936000 261000
Workings:
Bowls Plates Cups
Variable cost of goods sold =900000*60% =1400000*60% =780000*60%
Variable selling and administrative expenses =270000*82% =700000*82% =300000*82%
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