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The Mansfield Company manufactures and sells two lines of fishing rods. During the most recent accounting period, the Pro line and the Novice line
The Mansfield Company manufactures and sells two lines of fishing rods. During the most recent accounting period, the Pro line and the Novice line sold 18,400 and 5,400 units, respectively. The company's most recent financial statements are shown below: Sales Less cost of goods sold: Unit-level production cost Gross margin Pro $1,104,000 Novice $648,000 736,000 364,500 Depreciation, production equipment 176,000 135,000 $ 192,000 $148,500 Less operating expenses: Unit-level selling and administrative costs 48,500 175,500 Corporate-level facility expenses (fixed) 44,160 44,160 Net income (loss) $ 99,340 $(71,160) Based on this information, the company should: Multiple Choice Keep the Novice line because it contributes $148,500 to total profitability. It is impossible to determine with the given information. Eliminate the Novice line because it is operating at a loss.
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