Differential Analysis for a Discontinued Product A condensed income statement by product line for British Beverage Inc. indicated the following for Royal Cola for the past year: Sales $236,600 Cost of goods sold 111,000 Gross profit $125,600 Operating expenses 144,000 Loss from operations $(18,400) It is estimated that 16 % of the cost of goods sold represents fixed factory overhead costs and that 23 % of the operating expenses are fixed. Since Royal Cola 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 March 3, to determine whether Royal Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential Analysis Continue Royal Cola (Alt. 1) or Discontinue Royal Cola (Alt. 2) January 21 Differential Effect Continue Royal Cola (Alternative 1) Cola (Alternative 2) Discontinue Royal on Income (Alternative 2) Revenues Costs: Variable cost of goods sold Variable operating expenses Fixed costs $ Income (Loss) decrease b. Should Star Cola be retained? Explain. increase by $ As indicated by the differential analysis in part (A), the income would if the product is discontinued.

QUESTION 22 Which of the following is an incorrect statement?     Revenue - Operating Income = Gross Margin     Revenue = Price * Qty sold or TR = P*Q     EAT = EBT - Taxes     Income - Expenses = Operating Income     Revenue - CGS = Gross Profit

The method of comparators can be applied using the ratio of operating income to revenue as a basis for valuation. If operating income is negative this means operating income cannot be used to create a value multiple the value of the business is negative the value of the business is zero the business cannot be sold

What is meant by discontinued operations, and what can I put as one example.What is meant by comprehensive income? and what example can I put down