A Company Has Three Product Lines, One of Which Reflects

question 102

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:

Explanatory Style

A psychological attribute that indicates how people explain to themselves why they experience a particular event, either positively or negatively.

Delusion of Reference

A false belief that general occurrences, events, or interactions are uniquely related to oneself, often seen in psychiatric conditions like schizophrenia.

Impulse Control

The ability to resist or delay an impulse, drive, or temptation to act.

Bipolar

A mental health condition characterized by extreme mood swings, including emotional highs (mania or hypomania) and lows (depression).