Deep Pit Mining Mines Three Products

question 7

Multiple Choice

Deep Pit Mining mines three products. Gold ore sells for $1,000 per ton, variable costs are $600 per ton, and fixed mining costs are $250,000. The segment margin for 2018 was $(100,000) . The management of Deep Pit Mining was considering dropping the mining of gold ore. Only one-half of the fixed expenses are direct and would be eliminated if the segment was dropped.
What were the sales (in tons) for 2018?

• A)1,000 tons
• B)375 tons
• C)250 tons
• D)200 tons

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