Week 11 Chapter 25 Assignmentelbook Show Me How Differential Nnalysis for a Disc

Question

Week 11 Chapter 25 Assignmentelbook Show Me How Differential Nnalysis for a Discontinued Product A condensed incene statement by product line for Crown Beverage Inc. inkated the follow?) for ting Cda for the past year for King Cols for the ast 234,000 109,000 $125,000 145,000 Cost of goods sold Gross proe Operaltig expenses Loss from operations $(20,000) It is estimated the product is ?1connued fived. Since King Cols is only one of many products, the ncotsl mot that13% of the cost of goods sold represens find factory overhead costs and that 19% ct the opmoting experoes are Dfierential Analysis Contimae King Cola (Alh. 1) r Diecontinse King Cola (Alt. Continue Kig Cols (Atenative 1) Cokemative 2) (Ateemathve Type here to search.

Explanation / Answer

a.

Differential Analysis

Continue King Cola (Alt. 1) or Discontinue King Cola (Alt. 2)

January 21

b. King cola should be retained . As indicated by the differential analysis in part (a) , the income would decrease by $21720 if the product were discontinued.

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