West field Corporation makes two different boat anchors-atraditional fishing anc

Question

West field Corporation makes two different boat anchors-atraditional fishing anchor and a high-end yacht anchor-using thesame production machinery. The contribution margin of the yachtanchor is three times as high as that of the other product. Thecompany is currently operating at full capacity and has been doingso for nearly two years. Ralph Sampson, the company’s CEOwants to cut back on production of the fishing anchors. Hesays that this is a “no-brainer” because thecontribution margin of the yacht anchor is so much higher.

Explanation / Answer

     2.   Eliminate costs andbenefits that do not differ between alternatives

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