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cjr4808 cjr4808
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A year ago

Toxemia Salsa Corporation manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's income statement segmented by flavor (brackets indicate a negative amount):

WimpyMildMediumHotAtomic
Contribution margin$(2,000)$45,000$35,000$50,000$162,000
Segment margin$(16,000)$(5,000)$7,000$10,000$94,000
Allocated common fixed expenses$10,000$10,000$10,000$10,000$10,000
Segment margin less allocated
common fixed expenses		$(26,000)$(15,000)$(3,000)$ 0$84,000

Toxemia expects similar operating results for the upcoming year. If Toxemia wants to maximize its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue?



▸ no flavors should be discontinued

▸ Wimpy

▸ Wimpy and Mild

▸ Wimpy, Mild, and Medium
Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
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jojoliciouzjojoliciouz
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