Merced Corporation Is Considering Adding a New Product Line

question 91

Multiple Choice

Merced Corporation is considering adding a new product line. Market research indicates that sales revenue for the new line would be $80,000 for 35,000 units. Variable costs would be $1.70 per unit; direct fixed costs, $0.40 per unit; and indirect fixed costs, $0.50 per unit. If Merced added the new line, its income would:

• A) Increase by $20,500
• B) Increase by $6,500
• C) Decrease by $5,000
• D) Decrease by $11,000

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Definitions:

Effective Teams

Groups of individuals working together efficiently to achieve a common goal through collaboration, clear communication, and complementary skill sets.

Clear Objective

A specific, defined goal that is straightforward and easy to understand, guiding actions and decisions.

Competitive Relationships

Dynamics between entities (such as companies or individuals) in which they vie against each other to achieve superiority or dominance in a certain area.

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A controlled private network that allows access to partners, vendors, or selected customers, extending certain privileges of the company's intranet.