What information would sudsys leadership need

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Question: AP Sudsy, Inc., a producer of shower products, is evaluating the profitability of its men's, women's, and children's product lines. According to the information below, the men's category is unprofitable. Men's Shower Products Sales $150,000 Variable costs 90,000 Contribution margin 60,000 Fixed costs 75,000 Operating income (loss) $(15,000) Sudsy has been having difficulty tapping into the men's market for shower products but strategically would like to have a very broad product offering. Get expert-level assistance in any subject with our assignment help services.

If it drops the men's product line, though, it could free up $30,000 in fixed costs. Having a bit more flexibility in its use of resources could be helpful in improving Sudsy's other offerings. Required Would Sudsy be financially better or worse off if it dropped the men's shower products? By how much? At what amount of avoidable fixed costs would Sudsy be indifferent to keeping or dropping the men's line, considering only quantitative information? If the quantitative analysis supports dropping the men's products, what additional information would Sudsy's leadership need to consider before making a final decision on keeping or dropping the men's products? If the quantitative analysis supported dropping the men's product line, under what circumstances might Sudsy decide to still keep it?

Reference no: EM133926339

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