The income statement information for Kallapur and Trombley Cotton Growers follows:

REQUIRED
A. Using the quantitative decision rule, which product should the corporation emphasize?
Support your answer with calculations.
B. Using the general decision rule, should the corporation drop Regular (assuming no changes in demand for other products)? Support your answer with calculations. Show how operating income would change if Regular were dropped.
C. At what point (in bales) would the managers be indifferent to dropping Regular? In other words, what is the breakeven point for Regular?
D. What other information would you want before you make a decision about whether to dropRegular?

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Sales units Sales Variable costs Premium 100 bales $2,200 1400 Regular 100 bales $1,600 1000 Fancy 100 bales $1,800 1080 Total 300 bales $5,600 3,480 Contribution margin 640 725 520 1,885 Production line fixed costs Corporate costs (allocated)* Total fixed costs Operating income (loss S 70 (205) $ 95 $ (40