Your company has recently expanded into two new regions. At the end of the year when looking at the numbers, the CEO is considering whether or not to close one of the two new locations. The company currently allocates common fixed selling, general and administrative expenses (totaling $4,800) based on percentage of sales. The company allocates common fixed manufacturing costs (totaling $8,000) evenly across all locations. Below is the performance information reviewed by the CEO. Would you recommend dropping the Cleveland location?

Baltimore Pittsburgh Cleveland Cincinati Total

Sales	20,000	28,000	10,000	14,000	72,000
Variable Costs	10,000	14,000	7,000	7,000	38,000
Contribution Margin	10,000	14,000	3,000	7,000	34,000
Fixed Expenses	5,500	7,000	3500	3,000	20,000
Operating Income	4,500	7,000	(500)	4,000	14,000