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Gilbert Canned Produce ( GCP ) packs and sells three varieties of canned produce: green beans; sweet peas; and tomatoes. The company is currently operating
Gilbert Canned Produce GCP packs and sells three varieties of canned produce: green beans; sweet peas; and tomatoes. The company is currently operating at percent of capacity. Worried about the companys performance, the chief marketing officer is considering dropping the canned sweet peas. If sweet peas are dropped, the revenue associated with it would be lost and the related variable costs saved. In addition, the companys total fixed costs would be reduced by percent.Gilbert Canned Produce GCP packs and sells three varieties of canned produce: green beans; sweet peas; and tomatoes.
The company is currently operating at percent of capacity. Worried about the company's performance, the chief
marketing officer is considering dropping the canned sweet peas. If sweet peas are dropped, the revenue associated with it
would be lost and the related variable costs saved. In addition, the company's total fixed costs would be reduced by
percent.
Segmented income statements appear as follows:
Required:
a Prepare a differential cost schedule.
b Should Gilbert Canned Produce drop the sweet pea product line?
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