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Business, 22.07.2019 18:10 myohmyohmy

Acondensed income statement by product line for healthy beverage inc. indicated the following for fruit cola for the past year: sales $12,750,000 cost of goods sold 8,500,000 gross profit $ 4,250,000 operating expenses 6,000,000 loss from operations $ (1,750,000) it is estimated that 25% of the cost of goods sold represents fixed factory overhead costs and that 15% of the operating expenses are fixed. because fruit 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 january 5 to determine whether fruit cola should be continued (alternative 1) or discontinued (alternative 2). if an amount is zero, enter "0". use a minus sign to indicate a loss. differential analysis continue fruit cola (alt. 1) or discontinue fruit cola (alt. 2) january 5 continue fruit cola (alternative 1) discontinue fruit cola (alternative 2) differential effect on income (alternative 2) revenues $ $ $ costs: variable cost of goods sold variable operating expenses fixed costs income (loss) $ $ $ b. should fruit cola be retained?

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