"Ouch! Is that Deluxe model ever a loser! I say the time has come to cut back its production and shift our resources toward the new Finest model!" said Rachell Warner, executive vice-president of Wedgewood Acres Ltd. "Just look at this statement I've received from accounting. The Finest is generating more margin and significantly more profit than the Deluxe, and it has only about 40% as much in sales. I am convinced that our future depends on the Finest." The year-end statement to which Rachell was referring follows: Wedgewood Acres Ltd. Income Statement Product Model Finest $ 3,000,000 1740,000 1,260,000 Total Deluxe $10,200,000 7,200,000 Sales .. Cost of goods sold Gross margin.. Less selling and administrative expenses Operating income(loss).... 7860,000 6,120,000 1,080,000 2,004,000 S 336,000 1494,000 $(414 000) $-750.000 Number of units produced and sold Net income (loss) per unit 36,000 $(11.50) 12,000 $62.50 The numbers sure look that way," replied Con Artist, the company's sales manager. "But why isn't the competition more excited about the Finest? I know we've only been producing the model for three years, but I'm surprised that more of our competitors haven't recognized what a cash cow it is." "I think it's our new automated plant," replied Rachel. "Now it takes two direct-labour hours to produce a unit of the Deluxe and one direct-labour hour to produce a unit of the Finest. That's considerably less than it used to take us, especially for the Finest