Mr.Earl Pearl,accountant for Margie Knall Co. ,Inc. ,has prepared the following product-line income data: The following additional information is available:
* The factory rent of $1,500 assigned to Product C is avoidable if the product were dropped.
* The company's total depreciation would not be affected by dropping
C.
* Eliminating Product C will reduce the monthly utility bill from $1,500 to $800.
* All supervisors' salaries are avoidable.
* If Product C is discontinued,the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
* Elimination of Product C will make it possible to cut two persons from the administrative staff;their combined salaries total $3,000.
Required:
Prepare an analysis showing whether Product C should be eliminated.

Question

Mr.Earl Pearl,accountant for Margie Knall Co. ,Inc. ,has prepared the following product-line income data:   The following additional information is available:
* The factory rent of $1,500 assigned to Product C is avoidable if the product were dropped.
* The company's total depreciation would not be affected by dropping 
C.
* Eliminating Product C will reduce the monthly utility bill from $1,500 to $800.
* All supervisors' salaries are avoidable.
* If Product C is discontinued,the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
* Elimination of Product C will make it possible to cut two persons from the administrative staff;their combined salaries total $3,000.
Required:
Prepare an analysis showing whether Product C should be eliminated.

Quizplus · Accepted Answer

The Answer of Mr.Earl Pearl,accountant for Margie Knall Co. ,Inc. ,has prepared the following product-line income data:   The following additional information is available:
* The factory rent of $1,500 assigned to Product C is avoidable if the product were dropped.
* The company's total depreciation would not be affected by dropping 
C.
* Eliminating Product C will reduce the monthly utility bill from $1,500 to $800.
* All supervisors' salaries are avoidable.
* If Product C is discontinued,the maintenance department will be able to reduce monthly expenses from $3,000 to $2,000.
* Elimination of Product C will make it possible to cut two persons from the administrative staff;their combined salaries total $3,000.
Required:
Prepare an analysis showing whether Product C should be eliminated.

MrEarl Pearl,accountant for Margie Knall Co