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After seeing the income statement in the main body of the problem, management has decided to eliminate the cocoa powder because it is not returning a profit, and to focus all available resources on promoting the chocolate chips.

a. Based on the statement you have prepared, do you agree with the decision to eliminate the cocoa powder? Explain your answer.

b. Based on the statement you have prepared, do you agree with the decision to focus all available resources on promoting the chocolate chips? Assume that there is adequate demand for all three products.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91729533

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