Reference no: EM132530406

You must evaluate the performance of all three product lines as management is concerned with the viability of the washer-dryer combination product. They provide you with the latest annual information by product:

                         High-End Set                Economical Set                        W/D                     Combo Total

Sales                       $4,700,000                 $4,060,000                $880,000              $9,640,000

Labor                    $(1,250,000)                     $(1,015,000)             $(235,000)             $(2,500,000)

Materials                $(1,885,000)                     $(1,220,000)                 $(315,000)               $(3,420,000)

Direct fixed costs      $(325,000)                       $(220,000)                   $(250,000)                   $(795,000)

Allocated fixed costs   $(650,000)                   $(650,000)                      $(650,000)                      $(1,950,000)

Net Income                    $590,000                    $955,000                     $(570,000)                         $975,000

• You are asked to perform an analysis to determine whether to drop or keep the washer-dryer combination product and present your findings, including the steps taken to make your determination. You are also asked to evaluate if the costing methodology is appropriate and, if not, recommend alternative methods.

Question 1: Describe the circumstances of the case study and make the required recommendations. Explain your approaches to the problems, perform relevant calculations and analyses, and justify your recommendations. Evaluate the results and explain what each calculated value means. Ensure your work and conclusions are thoroughly supported.