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Toxemia Salsa Corporation manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's
Toxemia Salsa Corporation manufactures five flavors of salsa. Last year, Toxemia 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): Medium $35,000 Hot $50,000 Atomic $162,000 Contribution margin Segment margin Allocated common fixed expenses Wimpy $ (2,000) $(16,000) $ 10,000 Mild $ 45,000 $ (5,000) $ 10,000 $ 7,000 $10,000 $10,000 $ 94,000 $10,000 $ 10,000 Segment margin less allocated common fixed expenses $(26,000) $(15,000) $(3,000) $ 0 $ 84,000 Toxemia expects similar operating results for the upcoming year. If Toxemia wants to maximize its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue
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