Chris Gibson Kitchenware Limited sells kitchen appliances to department stores. Product costs are ascertained using an absorption costing system from which the following statement has been prepared in respect of the business’s three product lines:

It has been estimated that costs are 60% variable and 40% fixed.

Required

(a). Restate the table distinguishing variable and fixed costs.

(b). Advise whether dishwashers should be dropped from the product range in order to improve profitability.

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Dishwashers Fridges Ovens Total £000s £000s £000s £000s Sales 180 330 270 780 Less total costs Profit/(loss) (200) (20) (250) 80 (220) 50 (670) 110