Wedding Supply Is Trying to Decide Whether or Not to Continue

question 49

Multiple Choice

Wedding Supply is trying to decide whether or not to continue distributing reception supplies.The following information is available for Wedding Supply's business segments. $\begin{array}{lrrr}&\text { Reception Supplies }&\text { Bridal Dresses }&\text { Floral Decorations }\\\hline\text { Sales } & \$ 160,000 & \$ 110,000 & \$ 210,000 \\\text { Variable costs } & 84,000 & 50,000 & 120,000\\\text { Contribution margin } & 76,000 & 60,000 & 90,000 \\\text { Direct fixed costs } & 50,000 & 20,000 & 25,000 \\\text { Allocated common fixed costs } & 30,000 & 25,000 & 30,000 \\\text { Net income }&(\$4,000) &\$15,000&\$35,000\end{array}$ If reception supplies are dropped, what change will occur to profit?

• A)Decrease by $26,000
• B)Decrease by $76,000
• C)Increase by $4,000
• D)None of these answer choices are correct.

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Definitions:

Vaccination

The administration of a vaccine to stimulate an individual's immune system to develop adaptive immunity to a pathogen.

Target Microorganism

Specific bacteria, viruses, fungi, or other microorganisms that are identified as objects for elimination or study.

Antibodies

Protein substances produced in response to a specific invader or antigen, marking it for destruction and thus creating immunity to that invader.

Immunity

A response to foreign microorganisms that occurs with repeated exposure and results in resistance to a disease.