2. Hasselhoff Camera is considering eliminating Model EOS1 from its camera line because of losses over the past quarter. The past three months of information for model EOS1 is summarized below:

Sales (1,000 units)$250,000

Manufacturing costs:

Direct materials90,000

Direct labor ($15 per hour)80,000

Support100,000

Operating loss($20,000)

Support costs are 70% variable and the remaining 30% is depreciation of special equipment for model EOS1 that has no resale value.

Should Hasselhoff Camera eliminate Model EOS1 from its product line? Why or why not?