ssidy Products Inc.is considering eliminating Model EOS1 from its product line because of losses over the past quarter. The past three months of information for model EOS1 is summarized below:

Sales (1,000 units) $225,000

Manufacturing costs: Direct materials 80,000

Direct labor ($15 per hour) 70,000 Support 100,000

Operating loss ($25,000)

Support costs are 70% variable and the remaining 30% is depreciation of special equipment for model EOS1 that has no resale value. Should Cassidy eliminate Model EOS1 from its product line? Why or why not?