Problem 7-12 Hiroole Unlimited produces and sells three lines of carpet: economy, standard, and deluxe. Jeff Choi, the chief financial officer of the company, has prepared the following report on the profitability in the past year. In the report, fixed costs are allocated based on yards of carpet. Yards of carpet Sales Less variable costs (dye, yarn, labor, etc.) Less fixed costs (depreciation, supervisory salaries, etc.) Profit (loss) Economy Standard Deluxe 30,200 45,300 7 5,500 $329,000 $698,000 $1,521,400 176,600 434,000 908,300 164,800 247,200 412,000 $(12,400) $16,800 $201,100 Total 151,000 $2,548,400 1,518,900 824,000 $205,500 Upon seeing the report, Matt Williams, the president of Hiroole Unlimited, suggested that the company should consider dropping the economy grade and concentrate on the two other lines. Jeff replied, however, that would lead to the cost allocation death spiral. Your answer is partially correct. Try again. Revise the report assuming the company drops the economy grade. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Standard Deluxe Total Yards of carpet 56625 94375 151000 Sales 698000 1521000 2219000 Less variable costs 434000 908300 1342300 Less fixed costs 309000 515000 824000 Profit (loss) 45000 97700 52700 Your answer is partially correct. Try again. If either the standard or the deluxe grades is reporting a loss in part a, revise the report assuming that it is also dropped. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Yards of carpet 151000 Sales 1521000 Less variable costs 908300 Less fixed costs 824000 Profit (loss) 211300 Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT