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 additional information below is available.

The factory rent of $1,500 assigned to Product C is avoidable if the product is dropped.

The company's total depreciation would not be affected by dropping Product C.

Eliminating Product C will reduce the total monthly utility bill from $4,000 to $3,000.

All supervisory salaries for Product C would be avoidable.

If Product C is discontinued, the maintenance department will be able to reduce total monthly expenses from $3,000 to $2,200.

Elimination of Product C will make it possible to cut two persons from the administrative staff. Currently, their combined salaries total $2,500.

Required: Prepare an analysis showing whether Product C should be eliminated. Provide numerical support for your findings.