Differential Analysis for a Discontinued Product A condensed income statement by product line for Lavonia Beverage Inc. indicated the following for Vim Cola for the past year: Line Item Description Amount Sales $237,400 Cost of goods sold (111,000) Gross profit $126,400 Operating expenses (144,000) Operating loss $(17,600) It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 21% of the operating expenses are fixed. Because Vim Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. Question Content Area a. Prepare a differential analysis dated November 2 to determine whether Vim 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) Vim Cola November 2 Line Item Description Continue Vim Cola (Alternative 1) Discontinue Vim Cola (Alternative 2) Differential Effects (Alternative 2) Revenues $Revenues $Revenues $Revenues Costs: Variable cost of goods sold Variable cost of goods sold Variable cost of goods sold Variable cost of goods sold Variable operating expenses Variable operating expenses Variable operating expenses Variable operating expenses Fixed costs Fixed costs Fixed costs Fixed costs Profit (loss) $Profit (loss) $Profit (loss) $Profit (loss) Question Content Area