Question
Can Manufacturing (1 point) A can manufacturing company produces and sells three different types of cans: Versions X, Y, and Z. Corporate overhead (rent, general
Can Manufacturing (1 point) A can manufacturing company produces and sells three different types of cans: Versions X, Y, and Z. Corporate overhead (rent, general and administrative expense, etc.) is allocated equally among the three product versions. A high-level, simplified profit/loss statement for the company is provided. Version X Version Y Version Z Total Net Can Sales $180,000 $240,000 $105,000 $525,000 Variable Costs $105,000 $135,000 $82,500 $322,500 Corporate Overhead $60,000 $60,000 $60,000 $180,000 Contribution to Profit $15,000 $45,000 -$37,500 $22,500 After reviewing the statement, company managers are concerned about the loss on Version Z and are considering ceasing production of that version. Should they immediately discontinue Version Z? Why or why not?
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