A condensed income statement by product line for British Beverage Inc. indicated the following for King Cola for the past year: Sales $236,100 Cost of goods sold 108,000 Gross prot $123,100 Operating expenses 144,000 Loss from operations \"15300) It is estimated that 16% of the cost of goods sold represents xed factory overhead costs and that 20% of the operating expenses are fixed. Since King 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 March 3, to detem'iine whether King Cola should be continued (Alternative 1} or discontinued (Alternative 2). If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential Analysis Continue King Cola (Alt. 1) or Discontinue King Cola (Alt. 2) January 21 Differential Effect on Income (Alternative 2) Continue King Discontinue King Cola (Alternative 1) Cola (Alternative 2) Reve nues Costs: Variable cost of goods sold Variable operating expenses Fixed costs DUDE U 0000 U Income (Loss) b. Should Star Cola be retained? Explain. Yes As indicated by the differential analysis in part (A), the income would increase by C if the product is discontinued