Alta Loma Industries Has Three Product Lines, A, B, and C.The

question 10

Multiple Choice

Alta Loma Industries has three product lines, A, B, and C.The following information is available: $\begin{array}{lrrr}&A&B&C\\\text { Sales } & \$ 100,000 & \$ 90,000 & \$ 36,000 \\\text { Variable costs } & \underline{76,000} & 48,000 & \underline{27,000} \\\text { Contribution margin } & \$ 24,000 & \$ 42,000 & \$ 9,000 \\\text { Fixed costs: } & & &\\\text { Avoidable } & 9,000 & 18,000 & 3,000 \\\text { Unavoidable } & \underline{6,000} & \underline{9,000} & \underline{8,400} \\\text { Operating income } & \underline{\$ 9,000} & \$ 15,000 & \$ 2,400\end{array}$ Assume that product line C is discontinued and replaced with product line B.This will double the production and sales of product line B without increasing fixed costs.Operating income will increase _____.

• A)$15,000
• B)$42,000
• C)$24,000
• D)$36,000

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Definitions:

Brain Activity

The electrical and chemical processes that occur within the brain, enabling thoughts, feelings, behaviors, and physiological functions.

Stimulant Drugs

Substances that increase alertness, attention, and energy by activating the central nervous system.

Ritalin

A stimulant medication commonly prescribed to treat attention-deficit/hyperactivity disorder (ADHD), enhancing focus and impulse control.

Adderall

A prescription medication typically used to treat attention deficit hyperactivity disorder (ADHD) and narcolepsy.