**Analysis of Mango Cola's Financial Performance**A condensed income statement by product line for Warrick Beverage Inc. provided the following financial summary for Mango Cola over the past year:- **Sales:** $237,400- **Cost of goods sold:** $(112,000)- **Gross profit:** $125,400- **Operating expenses:** $(146,000)- **Operating loss:** $(20,600)It is estimated that 14% of the cost of goods sold relates to fixed factory overhead costs, and 19% of the operating expenses are fixed. Since Mango Cola is just one of many products, the fixed costs will not significantly change if the product is discontinued.**Problem Statement:**a. Conduct a differential analysis dated February 29 to decide if Mango Cola should be continued (Alternative 1) or discontinued (Alternative 2). Input "0" if an amount is zero. Use a minus sign to indicate a loss if necessary.**Differential Analysis Table:**This analysis helps determine the financial impact of continuing or discontinuing Mango Cola.- **Revenues:** - Continue Mango Cola (Alternative 1): $[Input] - Discontinue Mango Cola (Alternative 2): $[Input] - Differential Effects: $[Input]- **Costs:** - **Variable cost of goods sold:** - Continue: $[Input] - Discontinue: $[Input] - Differential: $[Input] - **Variable operating expenses:** - Continue: $[Input] - Discontinue: $[Input] - Differential: $[Input] - **Fixed costs:** - Continue: $[Input] - Discontinue: $[Input] - Differential: $[Input]- **Profit (Loss):** - Continue: $[Input] - Discontinue: $[Input] - Differential: $[Input]b. **Decision Question:** Should Mango Cola be retained? [Response]**Graph/Diagram Description:**The differential analysis table is constructed to compare the financial outcomes of continuing versus discontinuing Mango Cola. This includes revenue, variable and fixed costs, and ultimately the profit or loss scenarios under each alternative. By analyzing these figures, informed decisions can be made regarding the product's future.

Sales revenue: It is the revenue earned by a business on selling the goods or providing services to the general public. Variable costs: These costs are incurred in conjunction to the volume of goods produced or sold. It indicates that these costs are incurred only when the goods are produced or sold. Fixed costs: These are costs which are incurred irrespective of the production or sale activities. It indicates that these costs are only incurred once and will not change with the change in the volume of goods produced or sold. Differential analysis: This is a technique of management accounting where in changes in revenues, costs and profits that arise as a result of business decisions taken are evaluated and the alternative with higher profits or less costs are chosen.The company shouldn’t discontinue mango cola as it will lose $22,820.

Business

Accounting

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 "0". 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 (Alternative 1) (Alternative 2) (Alternative 2) Mango Cola Effects Revenues Costs: Variable cost of goods sold Variable operating expenses Fixed costs Profit (Loss) b. Should Mango Cola be retained?