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Cost of goods sold $233,900 (112,000) $121,900 A condensed income statement by product line for Warrick Beverage Inc. indicated the following for Mango Cola
Cost of goods sold $233,900 (112,000) $121,900 A condensed income statement by product line for Warrick Beverage Inc. indicated the following for Mango Cola for the past year: Sales Gross profit Operating expenses Operating los (144,000) $(22,100) It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs and that 18% 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 Mango Cola Discontinue Mango Cola. Differential Effects Revenues Costs: Variable cost of goods sold Variable operating expenses Fixed costs (Alternative 1) (Alternative 2) (Alternative 2) 000 000 000
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