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The Draper Corporation is considering dropping its Doombug toy due to continuing losses. Data on the toy for the past year follow 11 ( 8
The Draper Corporation is considering dropping its Doombug toy due to continuing losses. Data on the toy for the past year follow 11 ( 8 015457 Sales of 15,aee units Variable expenses Contribution margin Fixed expenses Net operating loss $150,000 120,000 30,000 40.000 $(10,000) If the toy were discontinued, Draper could avoid $8,000 per year in fixed costs. The remainder of the fixed costs are not avoidable Assuming all other conditions stay the same, at what level of annual sales of Doombugs in units) should Draper be indifferent between discontinuing Doombugs or continuing the production and sale of Doombugs
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