The Draper Corporation Is Considering Dropping Its Doombug Toy Due

question 48

Multiple Choice

The Draper Corporation is considering dropping its Doombug toy due to continuing losses. Data on the toy for the past year follow: If the toy were discontinued, Draper could avoid $8,000 per year in fixed costs. The remainder of the fixed costs are not avoidable.
The annual financial advantage (disadvantage) for the company from discontinuing the production and sale of Doombugs would be:

• A) ($30,000)
• B) $10,000
• C) ($22,000)
• D) $18,000

---

Definitions:

NADH

Nicotinamide adenine dinucleotide (NADH) is the reduced form of NAD+ and plays a crucial role in energy metabolism, acting as an electron carrier in oxidative phosphorylation.

Citric Acid Cycle

A series of chemical reactions used by all aerobic organisms to generate energy through the oxidation of acetyl-CoA.

ATP

Adenosine triphosphate, a molecule that stores and transfers energy within cells, fueling various cellular processes.

NADH

Nicotinamide adenine dinucleotide (NAD) in its reduced form, NADH is a coenzyme that plays a vital role in energy metabolism and the electron transport chain in cells.