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The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year. Produce Fish & Meat Sundries Total

The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year.

Produce

Fish & Meat

Sundries

Total

Sales

$80,000

$120,000

$60,000

$260,000

Variable expenses

36,000

65,000

20,000

121,000

Contribution margin

44,000

55,000

40,000

139,000

Other costs

18,000

21,000

8,000

47,000

Segment margin

26,000

34,000

32,000

92,000

Allocated avoidable costs

2,000

3,000

3,000

8,000

Segment income

24,000

31,000

29,000

84,000

Allocated corporate costs

7,000

7,000

7,000

21,000

Corporate profit

$17,000

$ 24,000

$ 22,000

$ 63,000

Assume that the Sundries department has been discontinued and long-term capacity of the company has had time to adjust. The projected long-term effect of this action on annual corporate profits would be a decrease of:

A.

$40,000.

B.

$32,000.

C.

$29,000.

D.

$22,000.

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