Kliptite Company's industrial products division manufactures an automatic nailing and stapling gun used in the construction industry. Its fastener division manufactures various types of fasteners, including the nails and staples used in the gun. Looking at the latest product contribution statement, the newly-hired vice-president of production says, "Looks like we should discontinue production of the Rapid-Klip nail gun. Its contribution margin is only 8 percent. After allocating its fair share of fixed costs to it, the product will show a loss." The production manager is upset. He argues that discontinuing the gun will cause a decline in overall company profit. "Nonsense," says the vice president. "If you eliminate a product that loses money, you can only improve profits." Discuss the vice-president's comments. Discuss the reasons why the production manager might be right.