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ASAP please lago Company sells two items: Jelly Beans and Licorice. The company is considering dropping Jelly Beans. It is expected that sales of Licorice

ASAP please
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lago Company sells two items: Jelly Beans and Licorice. The company is considering dropping Jelly Beans. It is expected that sales of Licorice will increase by 30% as a result. Dropping Jelly Beans will allow the company to cancel its monthly rental of its sugar shucker costing $60 a month. The other existing equipment will be used for additional production of peanuts. The company's other fixed costs are allocated and will continue regardless of the decision made. A condensed, budgeted monthly income statement with both products is below: Total Jelly Beans Licorice Sales $40,000 $10,000 $30,000 Food materials 14,000 4,000 10,000 Direct labour 12,000 3,000 9,000 Equipment rental 1,600 700 900 Other allocated overhead 2,950 2.000 950 Operating income $.9.450 $ 300 $ 9.150 Prepare an incremental analysis to determine the financial effect of dropping soybean productions. HINT-be clear which of the costs are variable, fixed or mixed. If the company discontinues the Jelly Bean line: What are the revenues for the Licorice line? $ What are the company's food material costs? $ What are the company's direct labour costs? $ What are the equipment rental costs? $ What are the allocated overhead costs? $ Should the company discontinue the Jelly Bean line? What is the incremental difference if they go ahead with dropping the Jelly Bean line? $

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