Hello I need a detailed solution for part a (with calculation)Hello I need a detailed answer for part a (with calculations

Agnew Manufacturing produces and sells three models of a single product, Standard, Superior, and DeLuxe, in a local market and in a regional market. At the end of the first quarter of the current year, the following income statement in thousands of dollars) has been prepared. Total Local Regional Sales revenue $7,800 $6,000 $1,800 Cost of goods sold 6,060 4,650 1,410 Gross margin $1,740 $1,350 $ 390 Marketing costs 630 360 270 Administrative costs 312 240 72 Total marketing and administrative $ 942 $ 600 $ 342 Operating profits $ 798 $ 750 $ 48 Management has expressed special concern with the regional market because of the extremely poor return on sales. This market was entered a year ago because of excess capacity. It was originally believed that the return on sales would improve with time, but after a year, no noticeable improvement can be seen from the results as reported in the preceding quarterly statement. In attempting to decide whether to eliminate the regional market, the following information has been gathered. Sales revenue Variable manufacturing costs as a percentage of sales revenue Variable marketing costs as a percentage of sales revenue Products Standard Superior $3,000 $2,400 60% 70% 3 2 DeLuxe $2,400 60% 2 Sales revenue Variable manufacturing costs as a percentage of sales revenue Variable marketing costs as a percentage of sales revenue Products Standard Superior DeLuxe $3,000 $2,400 $2,400 60% 70% 60% 3 2 2 Product Sales by Markets Standard Superior DeLuxe Local Regional $2,400 $600 1,800 600 1,800 600 All administrative costs and fixed manufacturing costs would not be affected by eliminating the regional market. Marketing costs that are not listed as variable are fixed for the period and separable by market. Fixed marketing costs assigned to the regional market would be saved if that market were eliminated. Required a. Assuming there are no alternative uses for Agnew's present capacity, would you recommend dropping the regional market? Why or why not