The Transporter Business produces material handling equipment for use in commercial manufacturing. As part of its operations, Transporter has three distinct product lines: belts, conveyors, and elevators. The business is currently considering the elimination of the belt product line. The belt line's sales average $850 000 annually. Variable manufacturing costs and variable selling costs total $320 000 and $140 000, respectively. Fixed costs total $450 000, of which $120 000 are considered to be unavoidable.
Required:
(1) Prepare an analysis to determine the profit increase or decrease that would result if production of belts is discontinued.
(2) Should the business drop the belt line?

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The Answer of The Transporter Business produces material handling equipment for use in commercial manufacturing. As part of its operations, Transporter has three distinct product lines: belts, conveyors, and elevators. The business is currently considering the elimination of the belt product line. The belt line's sales average $850 000 annually. Variable manufacturing costs and variable selling costs total $320 000 and $140 000, respectively. Fixed costs total $450 000, of which $120 000 are considered to be unavoidable.
Required:
(1) Prepare an analysis to determine the profit increase or decrease that would result if production of belts is discontinued.
(2) Should the business drop the belt line?

The Transporter Business Produces Material Handling Equipment for Use in Commercial