Differential Analysis for a Discontinued Product A condensed income statement by product line for British Beverage Inc. indicated the following for King Cola for the past year: Sales $235,900 Cost of goods sold 112,000 Gross profit $123,900 Operating expenses 145,000 Loss from operations $(21,100) It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 21% of the operating expenses are fixed. Since King 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 March 3, to determine whether King Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential Analysis Continue King Cola (Alt. 1) or Discontinue King Cola (Alt- 2) January 21 Continue King Discontinue King Differential Effect Cola (Alternative 1) Cola (Alternative 2) on Income Alternative 2) Revenues 235,900 235,900 Costs: Variable cost of goods sold -1 12,000 X Variable operating expenses Fixed costs O X Income (Loss) 10 Feedback Check My Work b. Should Star Cola be retained? Explain. As indicated by the differential analysis in part (A), the income would discontinued. by $ if the product is check My Work