The Charlotte facility’s supply of recycled materials may no longer support three product lines.
In addition , the following condensed quarterly income statement by product line has been provided. The General Manager of the Charlotte operations is concerned that envelopes is showing a $(15,000) loss. He is convinced that, regardless whether the Company can secure additional recycled materials, the envelope production should cease. The GM has asked you to prepare an analysis of the effect of discontinuing the production of envelopes.
