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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 $237,400 Cost of
A condensed Income statement by product line for Warrick Beverage Inc. Indicated the following for Mango Cola for the past year: Sales $237,400 Cost of goods sold (111,000) Gross profit $126,400 Operating expenses (142,000) Operating loss $(15,600) It is estimated that 16% 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 tot required, use a minus sign to indicate a los Differential Analysis Continue (AIL 1) or Discontinue (Alt. 2) Mango Cola February 29 Continue Discontinue Differential Mango Cola Mango Cola Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues 337400 -237.400 Costs Variable cost of goods sold Variable operating expenses Fixed costs b. Profit (Loss) b. Should Mango Cola be retained
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