Terry Claire has recently joined the management team at Country Meat Processors Ltd. Terry has no experience in the meat processing industry, nor has Terry completed any managerial accounting courses. Terry is, however, related to the new President of the company.

The current "hot" topic at Country Meat Processors Ltd. is the poor returns generated on some of the low-end meat products. Sandy Jones wants to eliminate the entire sandwich meat line, as these products sell for an average of $2.10 per package, with the mechanical deboning process, and packaging costs totaling $1.00 per package and the butchering costs work out to $1.45 per package. If Sandy's recommendation is followed, the remaining meat will not be removed prior to sending the pieces of the carcass to the rendering plant. With no prior experience in this industry, Terry is not sure where to begin, as other meat processors are still producing and selling sandwich meats, so they must be able to keep their costs in line.

Required:

Need to write memo to Terry Claire outlining the issues that Terry should consider before deciding on the appropriate course of action regarding the sandwich meat product line. Remember Terry's background. Terry will come to you for assistance with every problem encountered, so it is to your advantage to ensure that Terry understands the nature of the problem and the alternatives available so as to be able to recognize similar situations in future.