Asus computers is considering eliminating model DE1 from its computer line because of loses over the quarter. Past 3 months info is summerised:
Sales (1000 computers) $250 000
Manufacturing costs:
Direct materials $140 000
Direct labor ($15/h) $ 30 000
Support $100 000
Operating loss ($20 000)
Support costs are 70% variable and the remaining 30% is depreciation of equipment for model DE1 that has no resale value.
Should Asus eliminate model DE1 from its product line? Why or why not?