1. A company makes several product lines. The following income statement from the past year is being used to analyze product performance for Product Q.

*The company estimates that 80% of COGS are variable and 40% of operating expenses are fixed.

Should the company discontinue operations for Product Q? Why or Why Not?

2. A company makes several product lines. The following income statement from the past year is being used to analyze product performance for Product Q. Sales $400,000 COGS 200,000 Gross Profit 200,000 Operating Expenses 300,000 Loss from Operations ($100,000) *The company estimates that 80% of COGS are variable and 40% of operating expenses are fixed. Should the company discontinue operations for Product Q? Why or Why Not? ||