Profitability Report

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Profitability Report

I’m studying for my Accounting class and need an explanation.

Discussion: Bob, A cost accountant prepares a product profitability report for his boss, Tom, the production manager. Much to Bob’s surprise, almost one third of the company’s products are not profitable. He say, “Tom, it looks like we will have to drop one third of our products to improve overall company profits. It’s a good thing we decided to look at profitability by product.” Do you think Bob should agree with this approach? Why? What questions would you ask in order to make a better decision on dropping the products?

Requirments: Answer all questions completely. Post should be 230 words or more, use only creditable sources.

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