Mr. Earl Pearl, Accountant for Margie Knall, Inc. has prepared the following product-line income data: PRODUCT Total A B C Sales................................................$ 100,000........$50,000.........$20,000...........$30,000 Variable Expenses.............................. 60,000..........30,000............10,000.............20,000 Contribution Margin............................. .40,000..........20,000............10,000.............10,000 Fixed Expenses: Rent................................................. .5,000...........2,500..............1,000...............1,500 Depreciation..................................... 6,000...........3,000..............1,200................1,800 Utilities.............................................4,000...........2,000.................500................1,500 Supervisors' salaries....................... 5,000.......... 1,500.................500................3,000 Maintenance....................................3,000...........1,500..................600..................900 Administrative Expenses................ 10,000...........3,000.................2,000..............5,000 Total Fixed Expenses........................ 33,000..........13,500...............5,800.............13,700 Net Operating Income........................ $7,000..........$6,500.............$4,200............($3,700) 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, currently, their combined salaries total $2,000. Required: Prepare an analysis showing whether product C should be eliminated. Articulate your findings