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AutoSave . OFF May2020Q - Saved to my Mac v Home Insert Draw Design Layout References Mailings Review View Tell me Share Comments Calibri 10,5 " A" A Aa Ap AaBbCcDdEe AaBbCcDdEe AaBbCcDc AaBbCcDdE: AaBb( AaBbCcDdE Paste BI Uvab X x A LA Normal No Spacing Heading 1 Heading 2 Title Subtitle Styles Dictate Sensitivity Pane 2 1 1 1 1 1 10 1 12 1 12, 1 15, 1 14, 1, 15, 1, 161 2 , 17 , 18 QUESTION 1 Gold Son. Bhd. offers three products for the construction industry: blocks, bricks and tiles. The following income statement shows the projected results, by products, for 2017 (in RM thousands): Blocks ('000) Bricks ('000) Tiles ('000) Total ('000) Sales revenue RM500 RM800 RM150 RM1450 Less: Variable expenses 250 180 140 870 Contribution margin 250 320 10 580 Less direct fixed expenses: Advertising 10 10 10 30 Salaries 37 40 35 112 Depreciation 53 40 10 103 Total direct expenses 100 90 55 245 Product margin RM150 RM230 RM(45) RM335 Less: common fixed expenses 125 Operating income RM210 This is the third consecutive year that the tiles segment is reporting losses. The managing director is considering dropping the product line as it would mean saving RM45,000 by dismissing the line's supervisor and eliminating depreciation. a) Should the tiles division be closed based on the above information? Show your analysis of data. b) Discuss 3 qualitative factors that would need to be considered before a decision on whether to keep or drop a product is adopted? c) The marketing manager suggested that if the tile product is dropped, sales and variable costs of blocks would reduce by 10%, and sales and variable costs of bricks by 8% since customers tend to buy all three products together. Hence if the tile product is dropped, customers will buy blocks and bricks elsewhere. Does this mean it is better to keep the tile product line? (Total Marke: 20 Markel Page 2 of 4 775 words X English (United Kingdom) Focus + 173%