Question

The condensed product- line income statement for Dish N’ Dat Company for the month of March is as follows:


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, 2014, to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2).
b. Should the Cups line be retained?Explain.


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  • CreatedJune 27, 2014
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