Avon Garments Ltd manufactures readymade garments and uses its cut-pieces of cloth to manufacture dolls The following statement of cost has been prepared: Particulars Readymade garments Dolls Total Direct material $ 80,000 $6,000 $86,000 Direct labour 13,000 1,200 14,200 Variable overheads 17,000 2,800 19,800 Fixed overheads 24,000 3,000 27,000 Total Cost 1,34,000 13,000 1,47,000 Sales 1,70,000 12,000 1,82,000 Profit (loss) 36,000 1,000 35,000 The cut pieces used in dolls have a scrap value of $ 1,000 if sold in the market, As there is a loss of $ 1,000 in the manufacturing of dolls, it is suggested to discontinue their manufacture Advise the management.