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Author Question: Cassidy Products Inc.is considering eliminating Model EOS1 from its product line because of losses ... (Read 70 times)

dalyningkenk

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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 materials80,000
Direct labor ($15 per hour)70,000
Support100,000
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?


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Marked as best answer by dalyningkenk on Mar 6, 2021

dmurph1496

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dalyningkenk

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Reply 2 on: Mar 6, 2021
Thanks for the timely response, appreciate it


nathang24

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Reply 3 on: Yesterday
:D TYSM

 

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