Easton Corporation makes two different boat anchors—a traditional fishing anchor

Easton Corporation makes two different boat anchors—a traditional fishing anchor and a highendyacht anchor—using the same production machinery. The contribution margin of the yachtanchor is three times as high as that of the other product. The company is currently operating atfull capacity and has been doing so for nearly two years.Bjorn Borg, the company’s CEO, wants to cut back on production of the fishing anchor so that thecompany can make more yacht anchors. He says that this is a “no-brainer” because thecontribution margin of the yacht anchor is so much higher.Required:Write a short memo to Bjorn Borg describing the analysis that the company should do before itmakes this decision and any other considerations that would affect the decision.

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