O'Neil Enterprises produces a line of canned soups for sale at supermarkets across the country. Demand has been "soft" recently and the company is operating at 75 percent of capacity. The company is considering dropping one of the soups, beef barley, in hopes of improving profitability. If beef barley is dropped, the revenue associated with it will be lost and the related variable costs saved. The CFO estimates that the fixed costs will also be reduced by 25 percent. The following product line statements are available: Product Salas Variable coste Contribution margin Fixed costs allocated to each product line Operating profit (ass) Brath $35.100 22.800 $12.300 6.300 $ 6,000 Beef Barley $45.200 40.200 $ 5,000 7,600 $12,600) Minestrone $53,600 41,700 $ 11,900 8,700 $3,200 Required: a-1. Complete the following differential cost schedule. Status Quo Alternative: Drop Beef Barlay Difference (all lower under the alternative Revenue Lese: Variable costs Contribution margin Less: Fixed costs Operating profit (106) a-2. From an operating profit perspective, should O'Neil drop the beef barley line? Yes No a-2. From an operating profit perspective, should O'Neil drop the beef barley line? Yes O No b. When the product manager for the minestrone soup hears that managers are considering cropping the beef barley line, she points out that many O'Neil customers buy more than one soup flavor and if beef harley is not available from O'Neil, some of them might stop buying the other soups as well. She estimates that percent of the current sales of both broth and minestrone will be lost if beef barley is dropped. b-1. Complete the following differential cost schedule. Status Quo Alternative: Drop Beef Barley Difference (all lower under the alternative) Ravenue Less: Variable costs Cantribution margin Less Fixed costs Operating profit (loes) b-2. Based on the estimate from the project manager, should O'Neildrop the beef barley line? Yes No