Bordeaux Company Has Three Product Lines One of Which Reflects

question 134

Multiple Choice

Bordeaux Company has three product lines one of which reflects the following results: $\begin{array}{lr}\text { Sales } & \$ 215,000 \\\text { Variable expenses } & 125,000 \\\text { Contribution margin } & 90,000 \\\text { Fixed expenses } & 150,000 \\\text { Net loss } & \$(60,000) \end{array}$ If this product line is eliminated 50% of the fixed expenses can be eliminated and the other 50% will be allocated to other product lines. If management decides to eliminate this product line the company's net income will

• A) increase by $60000.
• B) decrease by $90000.
• C) decrease by $15000.
• D) increase by $15000.

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Definitions:

Echinoderms

A phylum of marine animals characterized by radial symmetry, a calcareous skeleton, and a water vascular system, includes starfish and sea urchins.

Primitive Groove

A depression or furrow on the surface of an early embryo that is involved in the process of gastrulation, leading to the development of different layers.

Gastrulation

An early embryonic phase in animal development during which the single-layered blastula is reorganized into a multilayered structure known as the gastrula.

Morula Stage

An early stage in embryonic development characterized by a solid ball of cells resulting from the division of a fertilized egg.