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 $234,300 Cost of goods sold (110,000) Gross profit $124,300 Operating expenses (144,000) Operating loss $(19,700) It is estimated that 16% 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 23 to determine whether Mango Cola should be continued (Alternativer 1) or discontinued (Alternative 2). If an amount is zero, enter "O". It 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 234,300 14300 Variable cost of goods sold 93,400 92.400 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 "o". 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 234.300 Costs: Variable cost of goods sold $2.400 Variable operating expenses 110,880 110.30 Fixed costs 0 0 Profit (Loss) b. Should Mango Cola be retained? Yes