The Management Accountant for the Chocolate S'more Company Has Prepared

Essay

The management accountant for the Chocolate S'more Company has prepared the following income statement for the most current year:
$\begin{array}{lrrrr}&\text { Chocolate }&\text { other Candy }&\text { Fudge }&\text { Total }\\\text { Sales } & \$ 40,000 & \$ 25,000 & \$ 35,000 & \$ 100,000 \\\text { Cost of goods sold } & 26,000 & 15,000 & 19,000 & 60,000 \\\text { Contribution margin } & 14,000 & 10,000 & 16,000 & 40,000 \\\text { Delivery and ordering costs } & 2,000 & 3,000 & 2,000 & 7,000\\\text { Rent (per sq. foot used) } & 3,000 & 3,000 & 2,000 & 8,000 \\\text { Allocated corporate costs } & 5,000 & 5,000 & 5,000 & 15,000 \\\text { Corporate profit } & \$ 4,000 & \$(1,000) & \$ 7,000 & \$ 10,000\end{array}$ a.Do you recommend discontinuing the Other Candy product line? Why or why not?
b.If the Chocolate product line had been discontinued,corporate profits for the current year would have decreased by what amount?