Toxemia salsa company manufactures five flavors of salsa


Toxemia Salsa Company manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's income statement segmented by flavor (brackets indicate a negative amount):

                                               Wimpy         Mild           Medium          Hot            Atomic

Contribution margin              $(2000)         $45,000      $35,000      $50,000          $162,000

Segment margin                     $(16,000)     $(5000)         $7000       $10,000           $94,000

Segment margin less allocated common fixed expenses

                                               $(26,000)     $(15,000)       $(3000)           $0              $84,000

Toxemia expects similar operating results for the upcoming year. If Toxemia wants to maximize its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue? A no flavors should be discontinued B wimpy C wimpy and mild D wimpy, mild, and medium.

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Financial Accounting: Toxemia salsa company manufactures five flavors of salsa
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