Product U23N Has Been Considered a Drag on Profits at Jinkerson

question 192

Multiple Choice

Product U23N has been considered a drag on profits at Jinkerson Corporation for some time and management is considering discontinuing the product altogether. Data from the company's budget for the upcoming year appear below: In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $144,000 of the fixed manufacturing expenses and $93,000 of the fixed selling and administrative expenses are avoidable if product U23N is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:

• A) $15,000
• B) $143,000
• C) ($143,000)
• D) ($15,000)

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Definitions:

Bipolar II Disorder

A form of mood disorder characterized by episodes of hypomania and severe depression, but without the full-blown manic episodes seen in Bipolar I Disorder.

Hypermania

A severe form of mania characterized by extremely elevated mood, energy, and activity levels, often disrupting daily functioning.

Rapid Cycling Mania

A pattern in bipolar disorder characterized by four or more episodes of mania or depression within a year.

Short Cycling Bipolar Disorder

A form of bipolar disorder characterized by rapid transitions between manic and depressive episodes without the typical intervening periods of stability.