Hackerott Camera is considering eliminating Model AE1 from its camera line because of losses over the past quarter. The past three months of information for model AE1 is summarized below:
Manufacturing costs:
Support costs are 70% variable and the remaining 30% is depreciation of special equipment for model AE1 that has no resale value.
Should Hackerott Camera eliminate Model AE1 from its product line? Why or why not?

Question

Hackerott Camera is considering eliminating Model AE1 from its camera line because of losses over the past quarter. The past three months of information for model AE1 is summarized below:
  Manufacturing costs:
  Support costs are 70% variable and the remaining 30% is depreciation of special equipment for model AE1 that has no resale value.
Should Hackerott Camera eliminate Model AE1 from its product line? Why or why not?

Quizplus · Accepted Answer

The Answer of Hackerott Camera is considering eliminating Model AE1 from its camera line because of losses over the past quarter. The past three months of information for model AE1 is summarized below:
  Manufacturing costs:
  Support costs are 70% variable and the remaining 30% is depreciation of special equipment for model AE1 that has no resale value.
Should Hackerott Camera eliminate Model AE1 from its product line? Why or why not?

Hackerott Camera Is Considering Eliminating Model AE1 from Its Camera