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Mr. Earl Pearl, accountant for Margie Knall Co., Inc., has prepared the following product -line income data: The following additional information is available: * The
Mr. Earl Pearl, accountant for Margie Knall Co., Inc., has prepared the following product -line income data: The following additional information is available: * The factory rent of $1,500 assigned to Product C is avoidable if the product were dropped. * The company's total depreciation would not be affected by dropping C. * Eliminating Product C will reduce the monthly utility bill from $1,500 to $800. * All supervisors' salaries are avoidable. * If Product C is discontinued, the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000. * Elimination of Product C will make it possible to cut two persons from the administrative staff: their combined salaries total $3,000. Required: Prepare an analysis showing whether Product C should be eliminated
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