The cost accountant at the Glass Company has prepared an analysis of
the profitability of each of the firm’s four products. That analysis is presented below.
All fixed costs are allocated costs.

Several suggestions have been made about changing the product mix in order to
reduce or eliminate the loss on Products R and S. The company’s management has asked you to prepare an analysis of the effects on the company’s net income before
taxes of each of the following proposals. (In each case, consider only the product
changes stated in the proposal. The activity of other products remains unchanged.

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Product Product Product Product Totals P Q R S Sales $62,600 $10,000 $18,000 12,600 $22,000 Cost of Goods Sold 44,274 4,750 7,056 13,968 18,500 Gross Profit on Sales $18,326 $ 5,250 $10.944 $(1,368) $ 3,500 Operating Expenses 12,012 1,990 2,976 2,826 4,220 Net Income $ 6,314 $ 3,260 $ 7,968 $(4,194) $ (720) Units Sold 1,000 1,200 Sales Price per Unit $10.00 $15.00 1,800 $ 7.00 2,000 $11.00 Variable Cost of Goods Sold per Unit $ 2.50 $ 3.00 $ 6.50 $ 6.00 Variable Operating Expenses per Unit $ 1.17 $ 1.25 $ 1.00 $ 1.20