1. 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	$233,200
   Cost of goods sold	(108,000)
   Gross profit	$125,200
   Operating expenses	(146,000)
   Operating loss	$(20,800)

   It is estimated that 13% of the cost of goods sold represents fixed factory overhead costs and that 21% 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 (Alternative 1)	Discontinue Mango Cola (Alternative 2)	Differential Effects (Alternative 2)
   Revenues	$fill in the blank 02d49dfba066fb5_1	$fill in the blank 02d49dfba066fb5_2	$fill in the blank 02d49dfba066fb5_3
   Costs:
   Variable cost of goods sold	fill in the blank 02d49dfba066fb5_4	fill in the blank 02d49dfba066fb5_5	fill in the blank 02d49dfba066fb5_6
   Variable operating expenses	fill in the blank 02d49dfba066fb5_7	fill in the blank 02d49dfba066fb5_8	fill in the blank 02d49dfba066fb5_9
   Fixed costs	fill in the blank 02d49dfba066fb5_10	fill in the blank 02d49dfba066fb5_11	fill in the blank 02d49dfba066fb5_12
   Profit (Loss)	$fill in the blank 02d49dfba066fb5_13	$fill in the blank 02d49dfba066fb5_14	$fill in the blank 02d49dfba066fb5_15

   b. Should Mango Cola be retained?