Nellie Tompkins is the owner and operator of Tompkins' Salsa Inc. ,a salsa production unit.She makes and sells only three types of salsa--peach,pear,and pineapple.The joint costs of leasing her professional kitchen for manufacture,transport,insurance,and so on are allocated on an equal basis to the three types of salsas.Last year's sales figures and allocated joint costs are given below.Should Tompkins' Salsa Inc.stop selling its pear salsa? Why or why not?
Definitions:
Return on Stockholders' Equity
A measure of financial performance calculated by dividing net income by shareholder equity, indicating how effectively a company uses investor funds.
Average Balance
The mean value of all balances held in an account over a certain period, often used to calculate interest in banking.
Ending Balance
The final amount in an account at the end of an accounting period, reflecting all transactions.
Discontinued Operation
A component of a business that has been sold, abandoned, or otherwise disposed of, which is reported separately from continuing operations on financial statements.
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