Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment. MARINETTE COMPANY
Income Statement-Canoe Segment
Sales $2,100,000
Variable costs
Direct materials $470,000
Direct labor 520,000
Variable overhead 320,000
Variable selling and administrative 210,000
Total variable costs 1,520,000
Contribution margin 580,000
Fixed costs
Direct 395,000
Indirect 320,000
Total fixed costs 715,000
Net income $(135,000)
1. If canoes are discontinued, calculate the net income lost or gained.
2. Should management discontinue the manufacturing of canoes?

answer; drop shippers;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.

yes the correct answer was

b.the increased supply will create a surplus.    

the correct answer is:     [c]:     " cyclical unemployment " .