The Mansfield Company manufactures and sells two lines of fishing rods. During the most recent accounting period, the Pro line and the Novice line sold 15,000 and 2,000 units, respectively. The company's most recent financial statements are shown below: Pro NoviceSales$900,000 $240,000 Less cost of goods sold: Unit-level production cost 600,000 135,000 Depreciation, production equipment 125,000 50,000 Gross margin$175,000 $55,000 Less operating expenses: Unit-level selling and administrative costs 40,000 65,000 Corporate-level facility expenses (fixed) 36,000 36,000 Net income (loss)$99,000 $46,000 Based on this information, the company should:
A. It is impossible to determine with the given information.
B. Eliminate the Novice line because it is operating at a loss.
C. Keep the Novice line because it contributes $55,000 to total profitability.
D. Keep the Novice line because it contributes $40,000 to total profitability.
Answer: D
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Indicate whether the statement is true or false