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A condensed income statement by product line for Crown Beverage Inc. indicated the following for Royal Cola for the past year: Sales Cost of goods
A condensed income statement by product line for Crown Beverage Inc. indicated the following for Royal Cola for the past year: Sales Cost of goods sold Gross profit Operating expenses Loss from operations (20,900) It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs and that 22% of the operating expenses are fixed. Since Royal 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 determine whether Royal Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter zero o. Use a minus sign to indicate a loss $233,100 108,000 $125,100 146,000 Differential Analysis Continue Royal Cola (Alt. 1) or Discontinue Royal Cola (Alt. 2) anuary 21 Continue Roya Discontinue Royal Cola (Alternative 1) Cola (Alternative 2) Differential Effect (Alternative 2) Revenues 233,100 0 233,100 Costs: Variable cost of goods sold Variable operating expenses Fixed costs Income (Loss
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