The demand for solvent, one of numerous products manufactured by Celecia Industries Inc., has dropped sharply because of recent competition from a similar product. The company's chemists are currently completing tests of various new formulas, and it is anticipated that the manufacture of a superior product can be started on July 1, one month in the future. No changes will be needed in the present production facilities to manufacture the new produc because only the mixture of the various materials will be changed. The controler has been asked by the president of the company for advice on whether to continue production during June or to suspend the manufacture of solvent until July 1. The following data have been assembled Celecia Industries Inc Income Statement-Solvent For the Month Ended May 311 Sales (25,000 units x $15 per unit) Cest of goods sold Gross profit Selling and administrative expenses Operating loss $575,000.00 (256,250.00) $118,750.00 (7750000) $41,250.00