Balser Corporation Manufactures and Sells a Number of Products, Including

question 77

Multiple Choice

Balser Corporation manufactures and sells a number of products, including a product called JYMP. Results for last year for the manufacture and sale of JYMPs are as follows: Balser is trying to decide whether to discontinue the manufacture and sale of JYMPs. All expenses other than fixed manufacturing overhead are avoidable if the product is dropped. None of the fixed manufacturing overhead is avoidable.
Assume that dropping Product JYMP would result in a $90,000 increase in the contribution margin of other products. If Balser chooses to discontinue JYMP, the annual financial advantage (disadvantage) of eliminating this product should be:

• A) ($40,000)
• B) $40,000
• C) ($2,000)
• D) $50,000

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Definitions:

Regional Elevations

Variations in height or altitude of an area's surface within a specific region, reflecting its topography.

Dense Crust

Refers to parts of the Earth's crust that are made up of heavier, denser materials, often found in oceanic crust compared to continental.

Less Dense Crust

Refers to the Earth's continental crust, which is less dense than oceanic crust, allowing it to float higher on the mantle.

Continental Crust

The dense segment of the Earth's crust responsible for the formation of big terrestrial masses, which is usually more ancient and complex compared to the oceanic crust.