A condensed income statement by product line for British Beverage Inc. indicated the following for King Cola for the past year: Sales $235,100 Cost of goods sold (110,000) Gross profit $125,100 Operating expenses (142,000) Operating loss $ (16,900) It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 21% of the operating expenses are fixed. Since King Cola is only one of many products, the fixed costs will not be significantly affected if the product is discontinued. Prepare a differential analysis report for the proposed discontinuance of King Cola.
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Home » Business » A condensed income statement by product line for British Beverage Inc. indicated the following for King Cola for the past year: Sales $235,100 Cost of goods sold (110,000) Gross profit $125,100 Operating expenses (142,000) Operating loss $ (16,900)