Differential Analysis for a Discontinued Product A condensed income statement by product line for Crown Beverage Inc. indicated the following for King Cola for the past year: Sales 3236,000 Cost of goods sold 108,000 Gross proft $128.000 Operating experies 142,000 Loss from operations $(14,000) It is estimated that 14% of the cost of goods sold represents fed factory overhead costs and that 20% of the operating expenses are foed. Since King Cole 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 March 3, to determine whether King Cols should be continued (Alternative 1) or discontinued (Alterative 2). If an amount is 200, enter ero o Use a mission to indicate a loss Differential Analysis Continue King Cola (Alt. 1) or Discontinue King Cola (Alt. 2) January 21 Differential Effect Continue King Discontinue King on Income Cola (Alternative 1) Cola (Alternative 2) (Alternative 2) Revervues Costs: Variable cost of goods sold Variable operating expenses Fixed costs Income (Loss) b. Should Sur Cols be retine? Explain if the product is discontinued As indicated by the differential malysis in part (A), the income would NE Prev