QUESTION 10 Ch. 25 Workout Question - Part A Malynn Music makes portable music players. The company has two product lines and is considering dropping the CD players line of products. A projected income statement for next year is shown below CD Players MP3 Players Sales Revenue 5300.000 5900.000 Variable costs (5225.000) (5585.000) Contribution Margin 575.000 5315.000 Faced Mfg Costs*** (570,000) (5225,000) Fixed Selling Costs (59.000) (59.000) Net Income (54.000) 581.000 *** Includes $180,000 of common forced manufacturing costs allocated based on sales revenue. The remaining fixed manufacturing costs are specific to each product line A Fixed selling costs are allocated from the sales department evenly between product lines if the CD Players line of products is eliminated. Malynn Music will be able to use its CD factory to make MP3 players. Using the CD factory to make MP3 players will be less efficient and will cause the overall Contribution Margin Ratio for the MP3 player line to decrease by five percentage points o f the current CMR s 12 percent the new CMR will be 7 percent) if Malynn Music drops CD Players, what will be the new contribution margin for the MP3 Player product line? Convert your percentage to a decimal when answering (e. If your answer is 7 percent, you should enter 0.07)