Differential Analns for a Discontinued Product A condensed income statement by product line for Lavonia Beverage Inc. indicated the following for Vim cola for the past year: Soles It is estimated that 14% of the cost of goods sold represents fixed factory overhead costs and that 20% of the operating expenses are fixed. Because Vim Cola is only one of many products, the fored 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 (Aternative 2 ), tf an amount is zero, enter " 0 ". If required, use a minus sign to indicate a loss. Differential Analysis Continue (AIt. 1) or Discontinue (AIt. 2) Vim Cola November 2 Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $601,700 and has $3$2,500 of accumulated depreciation to dote, with a new mechine that has a purchase price of $484,700. The old machine could be sold for $61,500. The annual variabie production costs associated with the old machine are estimated to be $155,500 per year for 8 years. The annual varlabie production costs for the new machine are estimated to be $99,600 per year for 8 yoars. a.1 Frepare a differental analysis dated December 10 to determine whether to continue wath (Aiternative 1) or replace (Altemative 2) the old machine. If an amount is zero, enter " 0 *, If required, use a minus sign to indicate a loss. Differential Analysis Continue with (AIt. 1) or Replace (AIt. 2) Old Machine December 10 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effects (Alternative 2) Revenues: Proceeds from sale of oly machine Costs: Purchase price Variabie productions costs (8 years) Profit (loss)