Maxell Companys garden chair product line has not reported a profit for several years. It generated a contribution margin of R17 000 last quarter, but reported a loss after fixed operating expenses, which are shown as follows:

Salary of the Product Line Manager R8 000

Advertising expense for the product R6 500

Corporate Headquarter utility Costs R2 000

Depreciation cost of corporate headquarter R3 000

Safety Insurance cost of the product R500

Corporate General administrative costs R8 000

The company estimates that the future performance of the product line will not be materially different from the last quarter.

Required:

Answer the following question and provide explanations and calculations for your answer. Should the company drop the product line on financial grounds?