plz help me

[mani maan]

Due to the declining popularity of digital watches, Swiss Company’s digital watch line has not reported a profit for several years. An income statement for last year follows:

Segment Income Statement—Digital Watches
	Rs.	Rs.
Sales....................................................................		500,000
Less variable expenses:
Variable manufacturing costs..........................	120,000
Variable shipping costs....................................	5,000
Commissions....................................................	75,000	200,000
Contribution margin............................................		300,000
Less fixed expenses:
General factory overhead(1)............................	60,000
Salary of product line manager........................	90,000
Depreciation of equipment (2).........................	50,000
Product line advertising...................................	100,000
Rent—factory space (3)...................................	70,000
General administrative expense (1)..................	30,000	400,000
Net operating loss................................................		(100,000)

1) Allocated common costs that would be redistributed to other product lines if digital watches were dropped
2) This equipment has no resale value and does not wear out through use
3) The digital watches are manufactured in their own facility

Should the company retain or drop the digital watch line?
plz isko koi solve ker day

plz any body solve this

 

[Zubair Hussain]

First of all we dont know what is the subject. If you would spent few extra seconds to write the subject code in subjectline. Someone might noticed it.

Exam are on head, people are reluctant to put hand in any other subject. 

regards

zubair hussain.

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[mani maan]

sorry subject ha mgt 402