3 points 15) The management accountant for the Company \"Production ONE\" has pr

Question

3 points 15) The management accountant for the Company "Production ONE" has prepared the following income statement for the most current year: Product1 Product2 Product3 Total Sales Cost of goods sold Contribution margin Delivery and ordering costs Rent (Corporate Office) Allocated corporate costs Corporate profit Do you recommend discontinuing the product line of "Product 2? Why or why not? $40,000 $35,000 $35,000 $100,009 26,000 25,000 19,000 60,000 14,000 10,000 2,000 4,000 3,000 2,000 5,000 5009 5.000 15.000 16,000 40,000 2,000 8,000 2,000 7,000 Wris A) No, I would not recommend discontinuing Product 2 because this product line contributes $6,000 towards corporate costs and profits B) Yes, I would recommend discontinue in Product 2 because this product line contributes $(1,000) losses. C) No, I would not recommend discontinuing Product 2 because this product line contributes $4,000 towards corporate costs and profits. D) None of these answers Show your work:

Explanation / Answer

option C) is the correct answer No, I would not recommend discontinuing product 2 because this product line contribute $4,000 towards corporate costs and profits contribution margin lost -10,000 saving in fixed costs delivery and ordering costs 4,000 Rent (corporate office ) 2,000 Net disadvantage -4,000

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