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EX 25-4 The condensed product-line of May is as follows: Differential analysis for a discontinued product income statement for Disi h N Dat Company for the month 0BI.1 tive 1 Dish N Dat Company Product-Line Income Statement For the Month Ended May 31 Bowls Plates $71,000 $105,700 $33,500 32,600 42.300 20,500 $38,400 63,400 $12,900 27400 42800 17,200 $11,000 $ 20,600 $(4,300) Cups Sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Fixed costs are 15% of the cost of goods sold and 30% of the selling and ad tive exp the Cups line were discontinued a. Prepare a differe enses. Dish N Dat assumes that fixed costs would not be materially affected if ntial analysis dated May 31 to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2) b. Should the Cups line be retained? Explain

iter a zero In celis you Would otherwise leave blank Differential Analysis Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2) For the Month Ended May 31 a. Differential Effect Continue Cups (Alternative 1) Discontinue Cups (Alternative 2) on Income (Alternative 2) Revenues Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Income (loss) 8 b. The Cups line should be since income bu 31 32 would if the cups is discontinued by 34

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Differential Ana lysis Continue Cups (Alt. 1) or Discontinue Cups (Alt. 2) For the Month Ended May 31 Differential Effect on Income 33500 Discontinue Continue Cups Cups Revenues Costs: Variable cost of goods sold Variable selling and administrative expenses Fixed costs Income (loss) 33500 17510 12040 8250 -4300 17510 12040 0 3950 8250 8250 Fixed Costs-15% * Cost of Goods Sold + 30% * Selling and Administrative Expenses Fixed Costs-15% * $20,600 + 30% * $17,200 Fixed Costs $8,250 The Cups line should be continued since income would decrease by $3,950 if the Cups is discontinued

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