The June profit and loss statement for the Browning Company is shown. If competitive conditions make price increases impossible and management has cut costs as much as possible, should the Browning Company stop selling to hospitals and schools? Why?

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Hospitals and Retailers Schools Total Sales: 80,000 units at $0.70 $56,000 $56,000 20,000 units at $0.60 Total 12,000 $12,000 12,000 68,000 56,000 Cost of sales 40,000 10,000 50,000 16,000 Gross margin 2,000 18,000 Sales and adminis- trative expenses: Variable 6,000 5,600 11,600 1,500 7,500 6,500 14,000 Fixed Total 900 2,400 $ 4,400 $ (400) $ 4,000 Net profit (loss)