Acondensed income statement by product line for celestial beverage inc. indicated the following for star cola for the past year: sales $394,200 cost of goods sold 185,500 gross profit $208,700 operating expenses 258,900 loss from operations $ (50,200) it is estimated that 18% of the cost of goods sold represents fixed factory overhead costs and that 27% of the operating expenses are fixed. because star cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued.

required:
a. prepare a differential analysis, dated january 21 to determine whether star cola should be continued (alternative 1) or discontinued (alternative 2). refer to the lists of labels and amount descriptions for the exact wording of the answer choices for text entries. for those boxes in which you must enter subtracted or negative numbers use a minus sign. if there is no amount or an amount is zero, enter "0". a colon (: ) will automatically appear if required.

b. should star cola be retained? explain.

labelscash flows from investing activitiescostsamount descriptionsfixed costsgain on sale of investmentsincome (loss)loss on sale of cost of goods soldvariable operating expenses

a. prepare a differential analysis, dated january 21 to determine whether star cola should be continued (alternative 1) or discontinued (alternative 2). refer to the lists of labels and amount descriptions for the exact wording of the answer choices for text entries. for those boxes in which you must enter subtracted or negative numbers use a minus sign. if there is no amount or an amount is zero, enter "0". a colon (: ) will automatically appear if required.