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Unformatted text preview: worth of expenses and ZERO revenue to offset that expense, increasing the total loss associated with the VCR line by an additional $40,000. As previously stated, the VCRs revenues do outweigh its variable costs, so in the short run it would be possible to eliminate further loss through a significant increase in VCR sales. However, due to decreasing VCR demand I would recommend, in the long run, that Video Avenue look into restructuring its manufacturing process in a way which would eliminate the fixed costs attached to the VCR line, allowing for a more profitable product line to replace it. If you have any questions or would like to discuss any aspect of my analysis, feel free to give me a call. Sincerely, Jacob McMillen Jacob McMillen Senior Accountant JM...
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This note was uploaded on 05/26/2011 for the course ACCT 5720 taught by Professor Staff during the Spring '08 term at University of Georgia Athens.
- Spring '08