The Following Information Pertains to Salamandre Company's Three Products Assume That Product C Is Discontinued and the Extra Space

question 98

Multiple Choice

The following information pertains to Salamandre Company's three products: $\begin{array}{lrrr}&A&B&C\\\text { Unit sales per year } & 250 & 400 & 250 \\\text { Selling price per unit } & \$ 9.00 & \$ 12.00 & \$ 10.00 \\\text { Variable costs per unit } & 3.60 & 9.00 & 11.00\\\text { Unit contribution margin } & \$ 5.40 & \$ 3.00 & \$(1.00) \\\text { Contribution margin ratio } & 60 \% & 25 \% & (10) \%\end{array}$ Assume that product C is discontinued and the extra space is rented for $300 per month. All other information remains the same as the original data. Annual profits will

• A)remain the same.
• B)increase by $250.
• C)decrease by $250.
• D)increase by $550.

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Definitions:

Repayment Rates

The percentage of borrowed principal that is paid back to lenders within a specified period of time.

Conditional Cash Transfers

Anti-poverty programs in which households receive regular cash transfers (grants) as long as they keep their children in school and participate in preventative health care programs.

Poor Families

Households with income levels below a designated poverty threshold, facing financial hardship.

State Industries

Industries that are owned, operated, or controlled by the government.