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Hasselhoff Camera Is Considering Eliminating Model EOS1 from Its Camera

Question 195

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Hasselhoff Camera is considering eliminating Model EOS1 from its camera line because of losses over the past quarter.The past three months of information for model EOS1 is summarized below:
 Sales (1,000 units) $250,000 Manufacturing costs:  Direct materials 90,000 Direct labor ( $15 per hour) 80,000 Support 100,000 Operating loss ($20,000)\begin{array}{lr}\text { Sales (1,000 units) } & \$ 250,000 \\\text { Manufacturing costs: } & \\\text { Direct materials } & 90,000 \\\text { Direct labor ( } \$ 15 \text { per hour) } & 80,000 \\\text { Support } & 100,000 \\\text { Operating loss } & (\$ 20,000)\end{array} Support costs are 70% variable and the remaining 30% is depreciation of special equipment for model EOS1 that has no resale value.
Should Hasselhoff Camera eliminate Model EOS1 from its product line? Why or why not?

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No,Hasselhoff Camera should no...

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