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Question - Sports Hats, Etc. has two product lines: baseball helmets and football helmets, Income statement data for the most recent year follow:
Total
Baseball Helmets
Football Helmets
Sales revenue
$460,000
$310,000
$150,000
Variable expenses
355,000
235,000
120,000
Contribution margin
105,000
75,000
30,000
Fixed expenses
76,000
38,000
Operating income (loss)
$29,000
$37,000
$(8,000)
Should the company keep or drop Football Helmets? Give numerical justification for your answer.
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