Tracey Douglas is the owner and managing director of Heritage Garden Furniture,

Question

Tracey Douglas is the owner and managing director of Heritage Garden Furniture, Ltd., a South African company that makes museum-quality reproductions of antique outdoor furniture. Ms. Douglas would like advice concerning the advisability of eliminating the model C3 lawnchair. These lawnchairs have been among the company%u2019s best-selling products, but they seem to be unprofitable.

The following additional data have been supplied by the company:

What would sales of the model C3 lawnchair have to be, at minimum, in order to justify retaining the product? (Omit the "R" sign in your response.)

A condensed absorption costing income statement for the company and for the model C3 lawnchair for the quarter ended June 30 follows:

Explanation / Answer

1 b NO*

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