A Company Has Three Product Lines, One of Which Reflects

question 160

Multiple Choice

A company has three product lines, one of which reflects the following results: $$\begin{array} { l r } \text { Sales } & \$ 215,000 \\\text { Variable expenses } & 125,000 \\\text { Contribution margin } & 90,000 \\\text { Fixed expenses } & 130,000 \\\text { Net loss } & \$ ( 40,000 ) \end{array}$$ If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines.If management decides to eliminate this product line, the company's net income will

• A)increase by $40,000.
• B)decrease by $90,000.
• C)decrease by $12,000.
• D)increase by $12,000.

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Definitions:

Design Language

A system of guidelines used to create a cohesive visual and functional style across a brand or product.

Fame and Uniqueness

Attributes of a brand or product characterized by widespread recognition and a distinctive quality that sets it apart from competitors.

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Valuable components or properties uniquely attributed to a brand that contribute to its equity and differentiation, including logos, trademarks, and customer goodwill.