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 $236,500 Cost of goods sold (108,000) Gross prot $128,500 Operating expenses (145,000) Operating loss $(16,500) It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs and that 23% 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 Discontinue Differential Mango Cola Mango Cola Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues #4 $7 $[ Costs: Variable cost of goods sold [:1 : [7 Variable operating expenses [ l .. ., [ 1 Fixed costs Profit (Loss) $Cl sg s[:l b. Should Mango Cola be retained? V