Deep Pit Mining Mines Three Products

Deep Pit Mining mines three products. Gold ore sells for $1,000 per ton, variable costs are $600 per ton, and fixed mining costs are $250,000. The segment margin for 2016 was $(100,000) . The management of Deep Pit Mining was considering dropping the mining of gold ore. Only one-half of the fixed expenses are direct and would be eliminated if the segment was dropped. What were the sales (in tons) for 2016?

A) 1,000 tons
B) 375 tons
C) 250 tons
D) 200 tons

Correct Answer:

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