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Hi Can I ask for help please P8-2. Continue or Discontinue Selling a Product Line. The introduction of resealable softdrinks bottles greatly reduced the sale

Hi Can I ask for help please

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P8-2. Continue or Discontinue Selling a Product Line. The introduction of resealable softdrinks bottles greatly reduced the sale of bottle anglers of Lavander Plastic Products, Inc. The product's operating result in a recent month is presented below: Sales (50,000 units) P70.000 Cost of sales 80,000 Loss on sales P10,900 Selling and administrative costs 20, 000 Total Loss P30 000 Total fixed costs included in the cost of sales and selling and adminis- trative costs amount to P40,000. Seventy-five percent of this total represents fixed factory overhead. In view of the losses incurred in the production and sale of bottle sealers, the company is considering to eliminate this product and one the facilities in the manufacture of another product, threaded bottle caps. This plastic product is intended to serve as spare caps in case the customers lose the original tin caps of the resealable softdrinks bottles. The company expects to sell 25,000 units of the new product at P1.50 per unit. Estimated unit variable costs for this product is P1. 10. The present total fixed cost is expected to increase by P5,000 per period due to the acquisition of additional equipments needed in the manufacture of threaded bottle caps. Required: Choose the best alternative: a. Continue producing and selling bottle sealers. b. Eliminate bottle sealers and leave the facilities idle. Eliminate bottle sealers and produce threaded bottle caps. Show computations to support your answer. different types

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