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

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A condensed income statement by product line for Warrick Beverage Inc. indicated the following for Mango Cola for the past year: Sales Cost of goods sold Gross profit Operating expenses Operating loss $235,900 (109,000) $126,900 (143,000) $(16,100) 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. Because Mango 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 February 29 to determine whether Mango 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) Mango Cola February 29 Continue Discontinue Mango Cola Mango Cola Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) 235,900 Revenues Costs: Variable cost of goods sold 92,650 Variable operating expenses 111,540 Fixed costs Profit (Loss) Mo oood 235,900 92,650 111,540 0 b. Should Mango Cola be retained?

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