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Mr. Earl Pearl, accountant for Margie Knall Co., Inc., has prepared the following product-line income data:
Product
The following additional information is available:
The factory rent of $1,500 assigned to Product C is avoidable if the product were dropped.
The company's total depreciation would not be affected by dropping C.
Eliminating Product C will reduce the monthly utility bill from $1,500 to $800.
All supervisors' salaries are avoidable.
If Product C is discontinued, the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
Elimination of Product C will make it possible to cut two persons from the administrative staff; their combined salaries total $3,000.
Required:
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