SUFFOLK CHINA WARE COMPANY Product Income Differential Analysis Report Bowls Plates Cups Differential revenue from monthly sales: Revenue from sales Differential costs of monthly sales: Monthly...

Fixed costs are 35% of the cost of goods sold and 14% of the selling and administrative expenses. Suffolk China Ware assumes that fixed costs would not be significantly affected if the Cups line were discontinued.

a.Prepare a differential analysis report for all three products.

b.Which of the following statements about the Cups line is true?

SUFFOLK CHINA WARE COMPANY<br>Product Income<br>Differential Analysis Report<br>Bowls<br>Plates<br>Cups<br>Differential revenue from monthly sales:<br>Revenue from sales<br>Differential costs of monthly sales:<br>Monthly differential income from sales<br>%24<br>%24<br>

Extracted text: SUFFOLK CHINA WARE COMPANY Product Income Differential Analysis Report Bowls Plates Cups Differential revenue from monthly sales: Revenue from sales Differential costs of monthly sales: Monthly differential income from sales %24 %24
SUFFOLK CHINA WARE COMPANY Product-Line Income Statement Bowls Plates Cups Sales $656,000 $894,000 $279,000 Cost of goods sold (255,000) (327,000) (154,000) Gross profit $401,000 $567,000 $125,000 Selling and administrative expenses (286,000) (355,000) (152,000) Operating income (loss) $115,000 $212,000 $(27,000)

SUFFOLK CHINA WARE COMPANY<br>Product-Line Income Statement<br>Bowls<br>Plates<br>Cups<br>Sales<br>$656,000<br>$894,000<br>$279,000<br>Cost of goods sold<br>(255,000)<br>(327,000)<br>(154,000)<br>Gross profit<br>$401,000<br>$567,000<br>$125,000<br>Selling and administrative expenses<br>(286,000)<br>(355,000)<br>(152,000)<br>Operating income (loss)<br>$115,000<br>$212,000<br>$(27,000)<br>

Extracted text: SUFFOLK CHINA WARE COMPANY Product-Line Income Statement Bowls Plates Cups Sales $656,000 $894,000 $279,000 Cost of goods sold (255,000) (327,000) (154,000) Gross profit $401,000 $567,000 $125,000 Selling and administrative expenses (286,000) (355,000) (152,000) Operating income (loss) $115,000 $212,000 $(27,000)

Jun 10, 2022

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