Wombat Wholesalers Company Has Prepared the Following Income Statement Showing

Multiple Choice

Wombat Wholesalers Company has prepared the following income statement showing sales for the current year:
$$\begin{array} { l r r r r } \text { Company } & \text { A } & \text { B } & \text { C } & \text { Total } \\\text { Sales } & \$ & \$ & \$ & \$ \\\text { Cost of sales } & 50000 & 20000 & 30000 & 100000 \\\text { Contribution margin } & 30000 & 10000 & 20000 & 60000 \\\text { Marketing support } & 20000 & 10000 & 10000 & 40000 \\\text { Sales and delivery processing costs } & 2000 & 500 & 1500 & 4000 \\\text { Fixed costs allocated: } & 1500 & 500 & 3000 & 5000 \\\text { Rent } & & & & \\\text { Depreciation } & 2500 & 1000 & 1500 & 5000 \\\text { Administrative expenses } & 3000 & 1200 & 1800 & 6000 \\\text { Operating profit } & 4500 & 2600 & 5900 & 13000 \\ & 6500 & 4200 & ( 3700 ) & 7000\end{array}$$
The following additional information is available:
* The rent of $1500 assigned to Company C is not avoidable if the company is dropped.
* The company's total depreciation would not be affected by dropping Company C.
* Elimination of Company C will make it possible to cut two people from the administrative staff;their combined salaries total $3000.
If Company C was dropped,Wombat would have reported:

A) greater corporate profits.
B) the same amount of corporate profits.
C) lower corporate profits.
D) resulting profits cannot be determined.