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OK Salsa Corporation manufactures four flavors of salsa. Last year, OK Salsa generated net operating income of $40,000. The following information was taken from last
OK Salsa Corporation manufactures four flavors of salsa. Last year, OK Salsa 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): Wimpy Mild Medium Atomic Contribution margin ............ $(2,000) ... $45,000... $35,000 ..... $162,000 Segment margin ................ $(16,000) ... $(5,000)...... $7,000 ....... $94,000 Allocated common fixed expenses ............ .$10,000 ... $10,000.... $10,000 ....... $10,000 Segment margin less allocated common fixed expenses ............. $ (26,000) . $(15,000)....$(3,000) ....... $84,000 OK Salsa expects similar operating results for the upcoming year. If OK Salsa wants to maximize its profitability in the upcoming year, which flavor or flavors should OK Salsa discontinue
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