Biden Company sells two items, product A and product B in 2019. The company is considering dropping product B in 2020. It is expected that sales of product A will increase by 40% as a result. Dropping product B will allow the company to cancel its monthly equipment rental costing $200 per month. The other existing equipment will be used for additional production of product A. One employee at the corporate level, included in other allocated overhead costs, earning $500 per month can be terminated if product B production is dropped. Biden's other allocated overhead is all fixed, and will continue regardless of the decision made. A condensed, monthly income statement for June 2019 with both products follows Product A $10,000 Direct materials (variable cost) 2,500 Direct labor (variable cost) 2,000 Equipment rental (fixed cost) 300 1,000 $4,200 Product B $8,000 2,000 1,200 2,600 2,100 $ 100 Total $18,000 4,500 3,200 2,900 3,100 $ 4,300 Sales Other allocated overhead Operating income 1. Prepare a proper variable cost report showing the total revenue and cost analysis for June 2019. 2. Prepare a proper variable cost report showing the projected total revenue and cost analysis for June 2020, using June 2019 values for the projected outcome in dropping Product B. 3. Write a one page memo supporting your decision, Keep or Drop Product E