Chappy manufactures two lines of pants: Stripe and Plaid. Last year, the Stripe line sold 25,000 and the Plaid sold 32,000. Chappy is considering to eliminate the Stripe line based on the financial statement listed below:

Stripe Plaid

Sales $400,000 $900,000

Less: COGS Unit level 220,000 320,000

Deprecation production equipment 80,000 120,000

Gross Margin 100,000 460,000

Less: operating expenses:

Unit level SG&A 80,000 130,000

Corporate (facility level fixed cost) 60,000 60,000

Net income (loss) $(40,000) $270,000

Should Chappy eliminate the Stripe slacks line? _______________________