Mr. Earl Pearl, accountant for Margie Knall Co., Inc., has prepared the following monthly product-line income data:

he following additional information is available:

The factory rent of $4,500 assigned to Product C is avoidable if the product were dropped.

The companys total depreciation would not be affected by dropping C.

Eliminating Product C will reduce the monthly electricity bill from $4,500 to $2,400. The electricity bill is included in utilities expenses.

All supervisors salaries are avoidable.

If Product C is discontinued, the maintenance department will be able to reduce monthly expenses from $9,000 to $6,000.

Elimination of Product C will make it possible to cut two persons from the administrative staff; their combined salaries total $9,000.

Required:

Would you recommend the company discontinue Product C. Provide any analysis to determine your answer.

-- For any calculations, all work must be shown in order to receive full credit.