A condensed income statement by product line for Lavonia Beverage Inc. Indicated the following for Vim Cola for the past year: Sales Cost of goods sold Gross profit Operating expenses Operating loss It is estimated that 13% 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 b materially affected if the product is discontinued. 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 indicate a loss. $237,100 (108,000) $129,100 (145,000) $(15,900) Line Item Description Revenues Costs: Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Vim Cola November 2 Variable cost of goods sold Variable operating expenses Fixed costs Profit (loss) Mo 0000 0 000C Discontinue Differential Continue Vim Cola (Alternative 1) (Alternative 2) (Alternative 2) Effects Vim Cola

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Chapter1: Financial Statements And Business Decisions
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Homework help. Chapter 25, number 3. Need help filling in the blanks. Thank you!

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:
Sales
Cost of goods sold
Gross profit
Operating expenses
Operating loss
It is estimated that 13% 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.
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.
$237,100
(108,000)
$129,100
(145,000)
$(15,900)
Line Item Description
Revenues
Costs:
Differential Analysis
Continue (Alt. 1) or Discontinue (Alt. 2) Vim Cola
November 2
Variable cost of goods sold
Variable operating expenses
Fixed costs
Profit (loss)
Aanjo mood
O
oood
Continue
Discontinue
Vim Cola
Vim Cola
(Alternative 1) (Alternative 2) (Alternative 2)
Differential
Effects
Transcribed Image Text: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: Sales Cost of goods sold Gross profit Operating expenses Operating loss It is estimated that 13% 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. 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. $237,100 (108,000) $129,100 (145,000) $(15,900) Line Item Description Revenues Costs: Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Vim Cola November 2 Variable cost of goods sold Variable operating expenses Fixed costs Profit (loss) Aanjo mood O oood Continue Discontinue Vim Cola Vim Cola (Alternative 1) (Alternative 2) (Alternative 2) Differential Effects
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