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The Following Information Pertains to Dallas Churning Company's Three Products

Question 113

Multiple Choice

The following information pertains to Dallas Churning Company's three products: DEF Unit sales per month 9001,400800 Selling price per unit $6.00$11.25$7.50 Variable costs per unit 3.009.007.80 Unit contribution margin $3.00$2.25$(0.30) \begin{array}{lrrr}&D&E&F\\\text { Unit sales per month } & 900 & 1,400 & 800 \\\text { Selling price per unit } & \$ 6.00 & \$ 11.25 & \$ 7.50 \\\text { Variable costs per unit } & 3.00 & 9.00 & 7.80 \\\text { Unit contribution margin } & \$ 3.00 & \$ 2.25 & \$(0.30) \end{array}
Assume that product F is discontinued and the space used to produce product F is rented for $600 per month. Monthly profits will


A) increase by $360.
B) increase by $840.
C) increase by $600.
D) decrease by $5,400.

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