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:

ICD-10 Tips

Advice or strategies for effectively using the International Classification of Diseases, 10th Revision, a medical classification list for coding diseases, symptoms, and procedures.

Empathetic

Put yourself in another person’s shoes; think about what is best for the patient.

Cosmetics

Products applied to the body to enhance or alter the appearance, typically including items like makeup, lotions, and fragrances.