Rackets Ltd. manufactures two models of badminton racquets. The company's product line income statement follows:

Management is considering dropping the Sportsman model line. Accountants for the company estimate that dropping the Sportsman line will decrease fixed cost of goods sold by $5,000 and fixed marketing and administrative expenses by $2,000.
Prepare an analysis supporting your opinion about whether or not the Sportsman product line should be dropped.

Question

Rackets Ltd. manufactures two models of badminton racquets. The company's product line income statement follows:
 
 Management is considering dropping the Sportsman model line. Accountants for the company estimate that dropping the Sportsman line will decrease fixed cost of goods sold by $5,000 and fixed marketing and administrative expenses by $2,000.
Prepare an analysis supporting your opinion about whether or not the Sportsman product line should be dropped.

Quizplus · Accepted Answer

The Answer of Rackets Ltd. manufactures two models of badminton racquets. The company's product line income statement follows:
 
 Management is considering dropping the Sportsman model line. Accountants for the company estimate that dropping the Sportsman line will decrease fixed cost of goods sold by $5,000 and fixed marketing and administrative expenses by $2,000.
Prepare an analysis supporting your opinion about whether or not the Sportsman product line should be dropped.