A condensed income statement by product line for Lavonia Beverage Inc. indicated the following for...

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Accounting

A condensed income statement by product line for Lavonia Beverage Inc. indicated the following for Vim Cola for the past year:
It is estimated that 13% of the cost of goods sold represents fixed factory overhead costs and that 22% of the operating expenses are fixed. Because Vim ola 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.
Differential Analysis
Continue (Alt.1) or Discontinue (Alt.2) Vim Cola
November 2
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