The Following Information Pertains to Dodge Company's Three Products Assume That Product C Is Discontinued and the Extra Space

Multiple Choice

The following information pertains to Dodge Company's three products: $\begin{array}{lrrr}&A&B&C\\\text { Unit sales per year } & 250 & 400 & 250\\\text { Selling price per unit } & £ 9.00 & £ 12.00 & £ 9.00 \\\text { Variable costs per unit } & 3.60 & 9.00 & 9.90 \\\text { Unit contribution margin } & £ 5.40 & £ 3.00 & £(0.90) \\\text { Contribution margin ratio } & 60 \% &25\%& 10) \%\end{array}$ Assume that product C is discontinued and the extra space is rented for £300 per month. All other information remains the same as the original data. Annual profits will

A) increase by £75.
B) decrease by £75.
C) increase by £525.
D) remain the same.