eBook Show Me How Differential Analysis for a Discontinued Product A condensed Income statement by product line for Crown Beverage Inc. indicated the following for Royal Cola for the past year $234,900 Cost of goods sold 109,000 Gross profit $125,900 Operating expenses 144,000 Low from operations 18,100) It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 22% of the operating expenses are fed incat Royal Cole is only one of my products, the fixed costs will not be materially affected if the product us discontinued . Prepare a differentin analysis, dated March 3, to determine whether Royal Colo should be continued. Alternative 1) or discontinued (Alternative 2). It un amount is nero, onder det *o Use a mission to indicate a loss Differential Analysis Continue Royal Cola (Alt. 1) or Discontinue Royal Cola (Alt. 2) January 21 Differential Effect Continue Royal Discontinue Royal on Income Cola (Alternative 1) Cola (Alternative 2) (Alternative 2) Revenues Variable cost of goods sold Vanable operating expenses und Fixed costs Pos Next Show Me How Loss from operations 3(18,100) It is estimated that 12% of the cost of goods sold represente fixed factory overhead costs and that 22% of the operating expenses are fixed. Since Royal Colo is only one of many products, the fixed costs will not be materially affected the product is discontinued Prepare a differential analysis, doted March , to determine whether Royal Cola should be continued (Alternative 1) or discontinued (Acerative), un amount is zero, enter of Use a minus sign to indicate a loss Differential Analysis Continue Royal Cola (Alt. 1) or Discontinue Royal Cola (Alt. 2) January 21 Differential Effect Continue Royal Discontinue Royal on Income Cola (Alternative 1) Cola (Alternative 2) (Alternative 2) Revenues Costs: Variable cost of goods sold Variable operating expenses Fixed costs Income (Loss) b. Should Star Colabe retained? Explain. As indicated by the differential analysis in part (A), the income would by if the product is discontinued