Segment Operations. Colson Manufacturing Company produces a variety of products. Sales of "Zlone." one of its products, total $500,000 per year; variable costs, $350,000 per year, and separable fixed costs, $80,000 per year. Common fixed costs allocated to Zlone total $120,000. Company management is considering dropping Zlone, although it has no alternative use for the facilities.

a. Why do you think management is considering dropping Zlone? h. Do you recommend that it be dropped? Explain.