1. High West Roller Company has three product lines: D, E, and F. The following information is available:

	D	E	F
Sales	$70,000	$40,000	$30,000
Variable costs	(40,000)	(20,000)	(25,000)
Contribution margin	30,000	20,000	5,000
Fixed expenses	(15,000)	(15,000)	(25,000)
Operating income (loss)	$15,000	$5,000	($20,000)

1. The company is thinking of dropping product line F because it is reporting an operating loss. Assume that $15,000 of total fixed costs could be eliminated by dropping F. Should product line F be dropped? You must demonstrate that High West is better off with your decision.