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Table 1 illustrates that the withdrawal of the 300 Series product line will affect labor, raw materials, power, and repairs. It will have no affect upon the other costs as they are either allocated across the three product lines or historical costs with no relevance. The result based upon period-end numbers for first six months of 1974 would project an operating income loss of $693,000 instead of $110,000 loss. To withdraw the 300 Series would be a poor decision.
Table 1.
300 Series - Selling price $2.75 Drop 300 Series
labor $349.00 $0.00
raw materials $404.00 $0.00
power $15.00 $0.00
repairs $5...
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