Williams Products Inc. manufactures and sells a number of items, including school knapsacks. The company has been experiencing losses on the knapsacks for some time, as shown by the contribution format income statement below:

WILLIAMS PRODUCTS INC Income Statement-School Knapsacks For the Quarter Ended June 30 Sales Variable expenses: $240,000 Variable manufacturing expenses Sales commissions $67,200 26,400 7,200 Shipping Total variable expenses 100,800 139,200 Contribution margin Fixed expenses: Salary of product-line manager General factory overhead Depreciation of equipment (no resale value) Advertising-traceable nsurance on inventories Purchasing department 8,750 47,350* 16,500 50,450 3,800 28,8401 lotal fixed expenses 155,690 Operating loss $ (16,490) Allocated on the basis of machine-hours. TAllocated on the basis of sales dollars Discontinuing the knapsacks would not affect sales of other product lines and would have no noticeable effect on the company's total general factory overhead or total purchasing department expenses