A Company Has Three Product Lines One of Which Reflects

question 90

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 $40000.
• B)decrease by $90000.
• C)decrease by $12000.
• D)increase by $12000.

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Definitions:

Sodium

A chemical element with symbol Na and atomic number 11, an essential ion for blood pressure regulation, fluid balance, and nerve function.

Incomplete Tetanus

A state of muscle contraction characterized by rapid cycles of contraction with partial relaxation in between.

Treppe

A phenomenon in muscle physiology where successive contractions become increasingly more forceful after several stimuli, often referred to as the "staircase effect."

Wave Summation

The phenomenon where muscle contractions become stronger due to the frequency of stimulation without allowing the muscle to fully relax between successive stimuli.