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A company operates numerous vending machines in a variety of locations. The company is expanding, needs more machines, and is deciding whether to move machines

A company operates numerous vending machines in a variety of locations. The company is expanding, needs more machines, and is deciding whether to move machines from unprofitable segments to meet this need. Abbreviated income statements of the two possible unprofitable segments are shown below. The other segments, not shown, are profitable with income over $200,000.

Non-Chain Motels

Local Parks

Sales

$250,000

$100,000

Cost of goods sold

130,000

50,000

Travel to service/refill machines

125,000

45,000

Allocated corporate costs

70,000

30,000

Income (loss)

$(75,000)

$(25,000)

Which segment(s) should be discontinued?

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