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

It is estimated that $13\%$ of the cost of goods sold represents fixed factory overhead costs and that $22\%$ of the operating expenses are fixed. Because Vim ola 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 November $2$ to determine whether Vim Cola should be continued $($Alternative $1)$ or discontinued $($Alternative $2).$ If an amount is zero,

enter $"0".$ If required, use a minus sign to indicate a loss.

Differential Analysis

Continue $($Alt$.1)$ or Discontinue $($Alt$.2)$ Vim Cola

November $2$