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ACE Store manufactures sports shoes and has two brands: Comfy and Steady. It has been brought to senior managements ationtion that the Steady product brand
ACE Store manufactures sports shoes and has two brands: Comfy and Steady. It has been brought to senior managements ationtion that the Steady product brand is unprofitable, and the company is oonsidering whether of not to continue this product brand 75% of the fixed costs of Sloady are direct forod costs which would be saved if production ceased. All other foxed costs wil remain the same. The following information is availablo for the fwo prodicds: Required: 1. What wil be the financial advantage (disadwantage) for the compary if the Steady product is dropped? Would you rocomment Jtat ino corr oaring dropt : Steady line and why? 2. Aseume that if the Stoady product tine is dropped, also the sales of Comty shoes the wil decrease by toy. What wil be the fnarelal advantage (dsadvantago) for the compeny under this allomativo and what would you tocommend and why? 3. Acooding to you culculation in roquiromont (1) B 12) which altemnative would be botter for the company and oxplain why? 4. Dotormino the cost and the amount that wil remain even if Steady ptoduet lire is sthosped
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