Vulcan Swimsuit Company is considering dropping its line of womens beach robes. A recent product income statement for the robe line as follows:

Revenue $950,760.00

Cost of Goods Sold $861,840.00

Gross Margin $88,920.00

Selling and Administrative expenses $136,800.00

Net loss ($47,880.00)

Factory overhead accounts for 35% of the cost of goods sold and is 1/3 fixed. These data are believed to reflect conditions in the immediate future.

Required:

Should the line be dropped?