Exercise 4-45 (Static) Dropping Product Lines (LO 4-4) Gilbert Canned Produce (GCP) packs and sells three varieties of canned produce: green beans; sweet peas; and tomatoes. The company is currently operating at 82 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 15 percent. Segmented income statements appear as follows: Green Beans Sweet Peas Tomatoes Sales $ 81, 500 $ 107, 000 $ 128, 0 Variable costs 57, 200 100, 300 104, 300 Contribution margin $ 24,300 $ 6, 700 $ 23, 700 Fixed costs allocated to each product line 9 , 780 12, 840 15, 360 Operating profit (loss) $ 14, 520 $ (6, 140) $ 8,340 Required: a. Prepare a differential cost schedule. b. Should Gilbert Canned Produce drop the sweet pea product line? x Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a differential cost schedule. (Select option "increase" or "decrease", keeping Status Quo as the base. Select "none" if there is no effect.) Alternative: Status Quo Drop Difference Sweet Peas Revenue $ 316,500 $ 209,500 $ 107,000 decrease Less: Variable costs 261,800 161,500 100,300 decrease Contribution margin $ 54,700 $ 48,000 $ 6,700 decrease Less; Fixed costs 37,980 32,283 5,697 decrease Operating profit (loss) $ 27,980 x $ 32,283 x $ 1,003 decrease Required B