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Author Question: The management accountant for the Chocolate S'more Company has prepared the following income ... (Read 295 times)

jrubin

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The management accountant for the Chocolate S'more Company has prepared the following income statement for the most current year: 

ChocolateOther CandyFudgeTotal
Sales$40,000$25,000$35,000$100,000
Cost of goods sold26,00015,00019,00060,000
Contribution margin14,00010,00016,00040,000
Delivery and ordering costs2,0003,0002,0007,000
Rent (per sq. foot used)3,0003,0002,0008,000
Allocated corporate costs5,0005,0005,00015,000
Corporate profit$4,000$(1,000)$7,000$10,000

a.  Do you recommend discontinuing the Other Candy product line? Why or why not?
b.  If the Chocolate product line had been discontinued, corporate profits for the current year would have decreased by what amount?


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Marked as best answer by jrubin on Mar 6, 2021

upturnedfurball

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