Sipacore 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.

Problem 7-12 Sipacore Unlimited produces and sells three lines of carpet: economy, standard, and deluxe. Jeff Choi, the chief nancial ofcer of the company, has prepared the following report on the protability in the past year. In the report, xed costs are allomted based on yards of carpet. Vards of carpet 30,200 45,300 75,500 151,000 Sales $322,000 $713,000 $1,543,700 $2,578,700 Less variable costs (dye, yarn, labor, etc.) 173,300 435,400 930,000 1,538,700 Less xed cosls (depreciation, supervisory salaries, etc.) 161,880 242,820 404,700 809,400 Prot (loss) $(13,180) $34,780 $209,000 $230,600 Upon seeing the report, Matt Williams, the president of Sipaoore 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. 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).) I Sa es $ $ $ Less variable costs Less xed costs Prot (loss) $ $ $ 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 eithera negative sign preceding the number e.g. -45 or parenleses e.g. (45).) Sales Less variable costs Less xed costs Prot (loss)