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Swanton company currently sells 3 products and details of

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Swanton Company currently sells 3 products and details of revenues and costs are given below. The company is thinking of discontinuing the production of paper clip holders. However, because many customers buy the products as a set, Swanton estimates that the sales of the other two products will decrease by 20%.#
Desk

  • Calendars Pen sets Paper-clip
  • Holders
  • Sales $280,000 $240,000 $24,000
  • Variable costs 160,000 160,000 26,000
  • Direct fixed costs 40,000 20,000 5,000
  • Indirect fixed costs 30,000 40,000 6,000

What is the net benefit or net loss of dropping the production and sale of paper clip holders? Show your work.

Reference no: EM13597162

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