The Mansfield Company Manufactures and Sells Two Lines of Fishing

question 7

Multiple Choice

The Mansfield Company manufactures and sells two lines of fishing rods. During the most recent accounting period, the Pro line and the Novice line sold 15,000 and 2,000 units, respectively. The company's most recent financial statements are shown below: Based on this information, the company should:

• A) Eliminate the Novice line because it is operating at a loss.
• B) Keep the Novice line because it contributes $40,000 to total profitability.
• C) Keep the Novice line because it contributes $55,000 to total profitability.
• D) It is impossible to determine with the given information.

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Definitions:

FASB Pronouncements

Official statements and standards issued by the Financial Accounting Standards Board (FASB) that dictate accounting methods and financial reporting practices.

Incremental Benefits

The additional advantages or gains received from an action or decision, beyond what was previously available.

Financial Reporting

Constructing communications that display the fiscal situation of an enterprise to its management team, financial backers, and governmental officials.