Differential Analysis Report for a Discontinued Product A condensed income statement by product line for Crown Beverage Inc. indicated the following for King Cola for the past year: Sales $236,300 (112,000) Cost of goods sold Gross profit $124,300 Operating expenses (146,000) $(21,700) Operating loss It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 18% of the operating expenses are fixed. Sin King Cola is only one of many products, the fixed costs will not be significantly affected if the product is discontinued. a. Prepare a differential analysis report for the proposed discontinuance of King Cola. Crown Beverage Inc. Proposal to Discontinue King Cola Differential Analysis Report Differential revenue from annual sales of King Cola: Differential cost of annual sales of King Cola: It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 18% of the operating expenses are fixed. Since King Cola is only one of many products, the fixed costs will not be significantly affected if the product is discontinued. a. Prepare a differential analysis report for the proposed discontinuance of King Cola. Crown Beverage Inc. Proposal to Discontinue King Cola Differential Analysis Report Differential revenue from annual sales of King Cola: Differential cost of annual sales of King Cola: b. Should King Cola be retained? Next