Prairie Inc

Multiple Choice

Prairie Inc. 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 the year was ($100,000) . The management of Prairie 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 the year?

A) 62.5 tons
B) 250 tons
C) 375 tons
D) 1,000 tons