Author Question: Cassidy Products Inc.is considering eliminating Model EOS1 from its product line because of losses ... (Read 44 times)

dalyningkenk · **on:** Mar 6, 2021

Cassidy Products Inc.is considering eliminating Model EOS1 from its product line because of losses over the past quarter. The past three months of information for model EOS1 is summarized below:

Sales (1,000 units)

$225,000

Manufacturing costs:

Direct materials

80,000

Direct labor ($15 per hour)

70,000

Support

100,000

Operating loss

($25,000)

Support costs are 70% variable and the remaining 30% is depreciation of special equipment for model EOS1 that has no resale value.

Should Cassidy eliminate Model EOS1 from its product line? Why or why not?

dmurph1496 · **Reply #1 on:** Mar 6, 2021

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