Differential Analysis for a discounted product

Differential Analysis for a Discontinued Product A condensed Income statement by product line for Warrick Beverage Inc, indicated the following for Mango Cols for the past year: Sales $235,700 Cost of goods sold (109,000) Gross profit $126,700 Operating expenses (144,000) Operating loss $(17,300) It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 21% of the operating expenses are fixed. Because Mango Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. a. Prepare a differential analysis dated February 29 to determine whether Mango Cols should be continued (Alternative 1) or discontinued (Alternative 2). 1r an amount is zero, enter "0". If required, use a minus sign to indicate a loss Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mango Cola February 29 Continue Discontinue Differential Mango Cola Mango Cola Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues 215.700 335,700 Costs: Variable cost of goods sold -95,920 95,930 Variable operating expenses 113.760 0 ||088 Fixed costs Profit (LOS) -17.300