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

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A condensed income statement by product line for Healthy Beverage Inc. indicated the following for Fruit Cola for the past year: Sales Cost of goods sold Gross profit Operating expenses Loss from operations It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 18% 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 (Alternativ 2). If an amount is zero, enter "O". Use a minus sign to indicate a loss $235,500 109,000 $126,500 146,000 $(19,500) Differential Analysis Continue Fruit Cola (Alt. 1) or Discontinue Fruit Cola (Alt. 2) Continue Fruit Cola (Alternative 1) Discontinue Fruit Cola (Alternative 2) Differential Effect on Income (Alternative 2) Revenues 235,500 235500v Costs: Variable cost of goods sold91,560 Variable operating expenses 119,720 Fixed costs 91,560 119,720 8,840 X -6,780 | X 0 X -33,060 | X Income (Loss)

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