Differential Analysis for a Discontinued Product 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 $15,000,000 (10,800,000) Gross profit $4,200,000 Operating expenses Operating loss (8,000,000) $(3,800,000) It is estimated that 30% of the cost of goods sold represents fixed factory overhead costs and that 25% 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 (Alternative 1) Differential Effects (Alternative 2) (Alternative 2) -15,000,000 15,000,000 Revenues Costs: Variable cost of goods sold 7,560,000 7,500,000