Balser Company Manufactures and Sells a Product Called JYMP -Balser Anticipates No Change in the Operating Results for JYMP

question 15

Multiple Choice

Balser Company manufactures and sells a product called JYMP. Results of last year for the manufacture and sale of JYMP's are as follows: $\begin{array}{lrr} \text { Sales ( \( 8,000 . J Y M P \) s at \( £ 120 \) each) . } &£ 960,000\\ \text { Less costs: } &\\ \text { Variable production costs. } &464,000\\ \text { Sales commissions (15\% of sales) . } &144,000\\ \text { Salary of product line manager.} &100,000\\ \text { Fixed product line advertising. } &160,000\\ \text { Fixed manutacturing overhead.} &132,000\\ \text { Total costs. } &1,000,000\\ \text {Net operating loss. } &£(40,000) \\\end{array}$

-Balser anticipates no change in the operating results for JYMP in the foreseeable future. Balser is reexamining all of its product lines and is trying to decide whether or not to discontinue the manufacture and sale of JYMPs. Total fixed manufacturing overhead costs would not be affected by a decision to drop any one product line. Assume that discontinuing the JYMP line would result in a £158,000 increase in the contribution margin of other product lines. How many JYMPs would have to be sold next year for the company to be as well off as if it just dropped the line and enjoyed the increase in contribution margin from other products?

---

Definitions:

Cognitive Problems

Difficulties in processing information, including perception, memory, and reasoning, that can affect learning and day-to-day functioning.

Psychodynamic Therapy

A therapeutic approach that explores the psychological forces underlying human behavior, feelings, and emotions, and how they might relate to early childhood experiences.

Cognitive Behavioral Therapy

A form of psychotherapy that aims to change patterns of thinking or behavior that are behind people's difficulties.

Solution-Oriented

An approach focused on finding effective and practical solutions to problems rather than dwelling on their causes.