A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year:

Sales	$237,400
Cost of goods sold	111,000
Gross profit	$126,400
Operating expenses	144,000
Loss from operations	$(17,600)

It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs and that 20% of the operating expenses are fixed. Because Fruit 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 January 5 to determine whether Fruit Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate a loss.

Differential Analysis
Continue Fruit Cola (Alt. 1) or Discontinue Fruit Cola (Alt. 2)
January 5
	Continue Fruit Cola (Alternative 1)	Discontinue Fruit Cola (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$fill in the blank 9b1cae02bf9f03b_1	$fill in the blank 9b1cae02bf9f03b_2	$fill in the blank 9b1cae02bf9f03b_3
Costs:
Variable cost of goods sold	fill in the blank 9b1cae02bf9f03b_4	fill in the blank 9b1cae02bf9f03b_5	fill in the blank 9b1cae02bf9f03b_6
Variable operating expenses	fill in the blank 9b1cae02bf9f03b_7	fill in the blank 9b1cae02bf9f03b_8	fill in the blank 9b1cae02bf9f03b_9
Fixed costs	fill in the blank 9b1cae02bf9f03b_10	fill in the blank 9b1cae02bf9f03b_11	fill in the blank 9b1cae02bf9f03b_12
Income (Loss)	$fill in the blank 9b1cae02bf9f03b_13	$fill in the blank 9b1cae02bf9f03b_14	$fill in the blank 9b1cae02bf9f03b_15

b. Should Fruit Cola be retained?