Problem - Vulcan Swimsuit Company is considering dropping its line of women's beach robber. A recent product income statement for the robe line follows:
Revenue $950,760
Cost of Goods Sold 861,840
Gross Margin 88,920
Selling and Admin Exp 136,800
Net Loss (-47,880)
A factory overhead account for 35 percent of the cost of goods sold and is one-third fixed. These data are believed to reflect conditions in the immediate future.
Required: Should the line be dropped?