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:

Question

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:

Quizplus · Accepted Answer

If it eliminates a product line, a company can avoid the unit-level, batch-level, product-level, and segment-level facility-sustaining costs.
Relevant Revenue and Cost Data for Segment:
 11ea7feb_d1d8_f52a_a768_25b5249e0ef5_TB3570_00_TB3570_00_TB3570_00 The annual depreciation expense is a measure of a cost that was incurred in a prior period. Since sunk costs have been incurred in past transactions, they cannot be changed and are not relevant for making current decisions.The company-wide facility-level costs are not relevant because the company will incur them whether it eliminates the segment.

The Mansfield Company Manufactures and Sells Two Lines of Fishing