SmartCard Is Considering Eliminating One of Its Product Lines

question 31

Multiple Choice

SmartCard is considering eliminating one of its product lines.The fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance.What financial effects occur if the product line is discontinued?

• A)Net income will decrease by the amount of the contribution margin of the product line being discontinued.
• B)The company's total fixed costs will increase.
• C)Total fixed costs will decrease by the amount of the product line's fixed costs.
• D)Net income will decrease by the amount of the product line's fixed costs.

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Definitions:

Repetition Priming

Priming that facilitates the cognitive processing of information after a recent exposure to that same information.

Implicit Memory

Implicit memory refers to unconscious memory, or the ability to recall or recognize information without deliberate effort.

Consciously Recollected

The act of deliberately retrieving information or memories from one's past with awareness.

State-Dependent Learning

The principle that information learned in a particular state of mind can more easily be recalled when in the same state.