DropProductLineDecision.

YouworkforWandaMaximoffCorporation.Wanda wantstoknowifthefirmshould drop a product line, the Replicator. Here's information from the quarterly segment reports.

Revenues	$27,000
FactoryRent	3,000
ReplicatorProductionSupervisorSalary	4,100
VariableManufacturingOverhead	1,400
DepreciationofEquipment	4,000
DirectLabor	4,000
OfficerSalaries	700
RoyaltiestoReplicatorInventor	1,800
DirectMaterials	15,000
ReplicatorSellingandMarketing	900
NetIncome(Loss)	( $7,900)

Equipment has no resale value. Officer salaries are this product line's allocation of salaries for the CEO and President of the firm, Wanda Maximoff. Royalties are a percentageofReplicatorrevenues.Rentandmaintenanceareallocationsofsharedcosts: space used by the Replicator line would remain idle if the product line were dropped.

Required:ShouldWandadroptheReplicator productline?Statewhy.